The controversial BNZ building on Wellington's waterfront is to be demolished after being heavily damaged in the Kaikōura earthquake.

Almost two years after it was closed due to earthquake damage, the landmark former BNZ building on the Wellington waterfront is coming down.

Owners CentrePort confirmed on Friday that the company had finally struck a $170 million deal with insurers, clearing the way for what was known as BNZ Harbour Quays to be demolished.

Completed in 2009, the 21,000 square metre Harbour Quays building, owned by CentrePort, has sat empty since the the November 2016 Kaikōura earthquake. It once had a rateable value of $95 million.

CentrePort, which also suffered extensive damage to its port infrastructure, has confirmed that it will not be building another commercial property on the site.

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"We plan to demolish the former BNZ building, based on the advice we have received as to its condition," CentrePort chief executive Derek Nind said in a statement.​

"We need a larger footprint as we work through our regeneration plans and reconfigure our land and berth capability," Nind said.

Part of a drive by the Wellington port company to use excess land for commercial property, the building has been dogged by problems. Even as it was being built, critics claimed that the building was ultimately likely to draw workers away from the central business direct.

twitter A photo of the BNZ dealing room emerged on Twitter after the 2013 Seddon earthquake, which suggested that if the earthquake had happened during work hours, staff would have been as risk of injury. One former staffer said they were "chastised" by a manager for sharing the photo on social media.

Property developer Ian Cassels welcomed the news, saying the building was "an adventure that weakened the CBD only to then add to the insurance costs of the commercial ratepayers who bear part of the burden of Wellington's earthquake losses".

Current and former BNZ staff have, generally, said they were pleased to be out of the building, both because of its relatively remote location and concerns due to repeated earthquake damage.

One former BNZ employee said yesterday that the building "was in the middle of nowhere", on the wrong side of a busy road some distance from the city.

"For those of us wanted to feel like you worked in the city, you may as well have been in Petone," the former staff member said. "The majority of people would be pretty happy to see the end of that building, I think."

When it was opened it was hailed as "state-of-the-art" for its ability to cope in earthquakes as well as environmental design.

But it was also closed for months in 2013, after the Seddon earthquake caused significant damage internally, with considerable water damage. A staff member sent on behalf of his team to retrieve items during the closure, described finding thick mould on chairs and mildew on the desk and carpets.

Photos from inside the building suggested that if the earthquake happened during work hours, staff would have been in danger. However BNZ returned to the building.

Kevin Stent Fenced off and empty, the five-story building previously known as BNZ Harbour Quays, is to be demolished, owners CentrePort said on Friday.

"I guess it felt a bit strange going back in [after the closure]," a staff member said. "But we had faith in the assessment that it felt safe. We got plenty of emails from [management] saying a full assessment had been done, so we felt safe enough going back there."

Staff have reported being chastised for sharing photos which emerged after the 2013 earthquake, while those who went to retrieve items after the 2016 earthquake were required to surrender their phones before entering.

Even after the 2016 earthquake, BNZ insisted for around 18 months that it intended to send staff back in. A day after the quake, a spokeswoman said staff were expected to return quickly.

After the nearby Statistics House partially collapsed, Government Statistician Liz MacPherson made a strong public statement on video, demanding answers.

Less than a week after the earthquake BNZ said it could be months before the building was reoccupied, as spokesman Richard Griffiths said if staff had followed procedure they would have been okay.

"It's really hard to speculate on that and I'd hate to. We have clear procedures for 'drop, cover, hold' with our desk space, where that actually is. It's really easy to say that, but if everyone did that, in the heat of the moment, then I think yes, everyone would have been okay."

KEVIN STENT/STUFF Completed in 2009, the Harbour Quays building will not be replaced with another commercial property, CentrePort said on Friday.

Eventually, almost 18 months later in March, BNZ announced it would not return to the building, immediately removing branding from the building.

No one from BNZ or CentrePort had ever commented substantively on the degree of impact of the 2016 earthquake, until on Friday CentrePort confirmed it was "badly damaged".

BNZ did not provide any comment on the news of the building coming down, referring questions about re-entry procedures to CentrePort.

CentrePort said in a statement that re-entry after the 2016 earthquake was under "strictly controlled conditions".

A week ago, CentrePort declined to comment on the future of the building, as it was still in negotiations with insurers.

The deal covers problems at a number of its buildings, including Statistics House, which partially collapsed in the Kaikōura earthquake, prompting a government review of New Zealand's building standards.

It also covers damaged to Customhouse, the only of its major commercial buildings which is currently tenanted, as well as Shed 39, "and other sundry buildings" CentrePort said in a statement.