The federal government wants to tear down the abandoned Winnipeg military base Kapyong Barracks after years of legal disputes with First Nations and spending millions of dollars to maintain the site.

Homeowners in Tuxedo on streets surrounding the barracks, located at the corner of Kenaston Boulevard and Grant Avenue, have received letters from the Department of National Defence (DND) letting them know about demolition plans for the building.

Demolition would include removing buildings, roadways, parking lots, and hydro, gas and water infrastructure.

"Demolition activities would involve proper handling and disposal of all hazardous materials, as well as the recycling of all building materials where possible," the letter reads.

The 64-hectare parcel of land has long been a source of tension between the City of Winnipeg, First Nations and the federal government for more than a decade.

Lyse Langevin, director general of infrastructure and environment for the federal Department of National Defence, said the buildings have issues with mould and asbestos — "Normal problems associated with buildings that have been vacant for so long," Langevin said.

"We are never going to use them again," she said. "The property is up for divestment."

The 2nd Battalion, Princess Patricia's Canadian Light Infantry, used to occupy the space, but it was relocated to CFB Shilo near Brandon, Man., in 2004. The site has sat empty since.

Langevin estimated it has cost the government about $1.5 million per year in security, taxes and upkeep, totalling between $15 and $20 million since 2004.

Langevin said the government was prevented from demolishing the buildings earlier by ongoing litigation that wrapped up last year.

In 2007, the federal Treasury Board tried to sell the site to Crown corporation Canada Lands Co. to take over re-development and resale of the land.

Treaty One First Nations disputed the deal, and in 2009, Justice Douglas Campbell ruled the transfer illegitimate, siding with First Nations who claimed they weren't adequately consulted.

The federal government appealed several times before then-prime minister Stephen Harper announced in 2015 his administration would no longer pursue an appeal.

Treaty One First Nation chiefs continued with negotiations in court over the years but they have had differences in opinion over how best to proceed with the land-claim deal.

No official numbers have been released regarding the value of the land. In 2015, Joe Banfield, a commercial real estate agent with Banfield Office Properties Group, estimated the land could be worth between $65 and $90 million, depending on how the land is parceled out.

City council property chairman John Orlikow (River Heights-Fort Garry) said Ottawa hadn't applied to the city for a demolition permit, but didn't need to because the buildings sit on federal land.

The demolition will move the city one step closer to being able to realize its long-term goal of widening Kenaston Boulevard, Orlikow said.

To proceed with the widening, the city needs to purchase some of the land at the site, he said. That process can't begin until the land finds a new owner.

"The demolition won't have anything to do with the widening, per se, except it moves the process along. We have to wait until the land settlement is settled and then we can start working on getting the easement that we need, even before the development is determined," Orlikow said.

"But we need to have someone get ownership of the land so we can start negotiating the easements for the widening."

Area councillor Marty Morantz (Charleswood-Tuxedo-Whyte Ridge) said he was pleased to learn of the demolitions because anything that moves the Kapyong redevelopment forward is welcome.

Morantz said he's eager to see the widening of Kenastion and the redevelopment of Kapyong lands into a mixed-use development that will be one of the biggest infill projects in Manitoban history.

The protracted Kapyong dispute has left the the city "like an innocent bystander," he said.

Langevin said the department wants to start tearing down the buildings in 2017. Demolitin could take two or three years, she said.

There's no word yet on how much it will cost, because the project has yet to go to tender.

In the meantime, the Department of National Defence is inviting homeowners in the area to voice any concerns they have about the demolition.

The department plans to conduct an environmental assessment before that happens to determine "potential adverse environmental effects" of the project.

"The results of the determination will not only indicate whether significant adverse environmental effects are likely to occur as a result of the project, but enable DND to determine if the project should be allowed to proceed as proposed or if additional mitigation measures and/or follow-up will be required," the letter reads.