The demolition of Aqua House marks the start of building work for the Fletton Quays development on Peterborough’s South Bank.
Work to strip out the interior of the vacant building, previously used as offices by the Environment Agency, began this week.
The demolition work will be carried out by Skanska and is expected to be complete early this summer.
It will be the first construction activity on Fletton Quays, a £120 million redevelopment that is set to include a hotel, offices and 280 homes.
The city council has also exchanged contracts unconditionally to buy the former mill building and site from Milton Estates, at a cost of £750,000, on Fletton Quays as part of the site s wider regeneration.
The council will be working with partners to explore converting the building to a new hub for arts and culture for the city, subject to identifying the funding.