The move by Dunedin's Community Alcohol and Drug Service (Cads) from rented premises in Moray Pl to Wakari Hospital is expected to cost up to $737,885.
Board facilities and site development manager Warren Taylor said the shift was part of a programme decided by the Otago District Health Board some years ago to consider "exiting leases and using our own assets" where it could.
It is separate from the board's master site plan, which will move some services from Dunedin Hospital to Wakari Hospital and allow substandard facilities to be upgraded.
Money for the first stage of this multimillion-dollar project has yet to be allocated by the Government.
Cads, which is in the AA building in Moray Pl, is expected to be relocated to Wakari Hospital towards the end of July.
The service will be on the ground floor in the east wing of the Wakari Hospital main block.
Work to accommodate the change included the removal of asbestos vinyl floor tiles before demolition could take place.
Construction began in March and there was some early delay involving the building consent due to interpretation of the documentation by one building inspector, but this was resolved.
In his recent report to the hospital advisory committee, Mr Taylor said work was about a week ahead of schedule.
The refit of the building will include new internal partitions, doors, internal and external insulation, a new suspended ceiling, electrical installations and new carpet tile and vinyl floor coverings.
The work is being carried out by building firms Kennedy and McBeath and Jeff King.
Mr Taylor's staff have also begun work reviewing risk assessments on plant and equipment on all board sites across Otago and Southland.
In the past, it had been common for money-conscious people in various areas of the boards' services to "put Band-Aids" on equipment which was getting old and this could increase the risk of failure, he said.
It was important to have an overall view of what the risks were for planning so the new board would know "which ones we need to tackle".
Mr Taylor said he expected some of the issues identified would be "quite major risks".
