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Demolition of the crippled Hotel Grand Chancellor could take up to a year.
Earthquake recovery minister Gerry Brownlee has announced that construction giant Fletchers has won the contract for the 10-month demolition of the unstable hotel, at a media conference inside the central-city red zone.
Brownlee said the hotel's deconstruction would be "the largest demolition ever carried out in New Zealand".
While it could take up to a year, Brownlee said it should be safe to re-open the central city area around the hotel within five or six months.
The Government commissioned a report by the US Army Corps of Engineers a month after the quake which warned that the demolition could damage a neighbouring hotel.
The US report, released to Radio New Zealand under the Official Information Act, says that either conventional demolition or the use of explosives could result in severe damage or total loss of the All Seasons Hotel.
A spokesperson for the All Seasons Hotel, Peter Hook, says he understands the demolition will cause some damage in the area but until the work is done the future of his hotel and the wider Cashel Street precinct is uncertain.