The 1054sq m building, in St Enoch's Church grounds in the centre of Alexandra, will provide a common facility for social service agencies and education, arts and craft groups. It is expected to be completed by the end of next year.
Two buildings on the site - Church House and the church hall - will be demolished, and the internal stripping-out of those buildings is already under way, project manager David Booth, of Octa Associates Ltd, said yesterday.
"We'll be keeping a few features from those buildings to include in the new building. And [builders] Breens are salvaging as much material as they can from the buildings to recycle, so the process will take a while," community house trust chairwoman Bernie Lepper said.
"It's very exciting that work is finally under way."
The mustard-block building nearest the church, known as Ranby House, will be removed and relocated. Demolition of the buildings will probably take place at the end of January or the start of February.
Mrs Lepper said the trees listed in the Central Otago District Council's register as "significant" would remain on site, while two or three others would be felled. One had already been dug up and shifted to the Molyneux Aquatic Centre.
All five tenants of the existing buildings have found temporary accommodation. Nine tenants have booked permanent space in the new facility, and dozens more groups have indicated they will use the rooms.
"I'd like to acknowledge all our funders of the project, in particular the Central Lakes Trust, which gave $1.6 million to the project," she said.
Fundraising was still under way for the building's internal fitting-out.