Businesses in the grade 2 property at 6-8 King Cross Street, Halifax, including Pine by Design, a podiatrist and an osteopath, will remain open during the work, which is due to be completed by 2008.

Heritage Works, a charity that specialises in restoring listed buildings, will be carrying out the work.

Director Kate Dickson said: "It is good to get works under way for 6-8 King Cross Street. It is a quality building that needs attention.

"We are delighted to be able to come to Halifax and work on this project. It is the start of what will be a much larger regeneration project at the Hopwood Lane gateway."

The property will undergo full renovations as part of a scheme to redevelop the triangular spot bordered by Hopwood Lane, King Cross Street and Hanover Street, in which it stands.

The site has been decaying for years.

In October the Courier reported that Calderdale Council had come up with a scheme to acquire the whole site, with the exception of Halifax Playhouse, and to promote its redevelopment.

Work to build offices, shops and apartments will be joinly funded by Yorkshire Forward, Action Halifax Urban Renewal and Lottery funding under the Halifax Townscape Heritage Initiative.

It is hoped the whole development will be completed by 2010.