Assuming, if there's more than one user, you are going to set up each potential user's iTunes separately, then as soon as you migrate the Library to the external source you can continue to use it in exactly the same way as before.
If you let iTunes handle the file storage, using 'Keep Media folder organised' in Prefs >Advanced, then it should work the same as local storage.
There is plenty of documentation on how to move the Library - which essentially boils down to using 'Consolidate' to do the move for you [your safety copy until you have success is still on your local machine, so you can afford to test it out.]
I have my Library stored in a similar way - I have the remote volume always mounted, so it shows in /Volumes ...
BTW, always keep your 'main' iTunes folder on your local machine, only move the Library itself.
What you cannot do [without a deal of manual intervention] is use the same library for multiple users.
Though this QA is concerned with maintaining sync between Mac & Windows machines, exactly the same difficulties would arise if trying to maintain sync between 2 Mac users trying to share the same remote Library folder - I'd avoid it if you can.
Ask Different - How to share an iTunes library between Mac & Windows?
Note: I haven't tested any of this in iTunes 12.7, which at time of writing I only installed yesterday.