You can find the answer in the FAQ
https://docs.docker.com/desktop/faqs/linuxfaqs/#how-do-i-move-the-file-to-a-bigger-drive
How do I move the file to a bigger drive?
To move the disk image file to a different location:
- Select Settings then Advanced from the Resources tab.
- In the Disk image location section, select Browse and choose a new location for the disk image.
- Select Apply & Restart for the changes to take effect.
Do not move the file directly in Finder as this can cause Docker Desktop to lose track of the file.