The owner of the site, KiwiRail, confirmed last week the building would be torn down.
The Department of Conservation is working closely with KiwiRail, the Otago Regional Council and the Waitaki District Council to investigate the historic contamination of the site, where the gas-making facility operated between 1876 and 1980.
It said site investigation took place in 1998, and in 2000 about 45cu m of contaminated material was removed.
However, significant contamination remained on site.
Erosion along the foreshore affected the stability of the site, which exposed additional contaminants.