Foodstuffs South Island property and development general manager Roger Davidson said the demolition of the above-ground structure was complete, and the excavation of structure was now under way.
At this stage, there was no definitive date on when the demolition would finish and the new construction would start, Mr Davidson said.
Once the demolition was complete the site will be used for extra parking, and landscaping would also be added to improve the surrounding environment.
The former tenants of the building have moved to new premises in Filleul St.