Miller Construction has been chosen as the main contractor to build York Council's new £32m headquarters and customer centre.
The Leeds-based firm will start work shortly on the historic site and will complete the 19-month contract refurbishment and new-build work by the end of 2012.
The council expects to save an estimated 17m over the next 25 years by relocating its operations to West Offices.
York Investors, a partnership between York-based S Harrison and property group Buccleuch, is behind the project.
Steve McManaman, Miller's operations manager, said: "This project provides us with the opportunity to employ local firms and people to work with us, bringing huge economic benefits to the community and local economy."