A Fredericton building that housed the offices of New Brunswick premiers and civil servants for years after it was built as a Centennial project will be sold to a private developer for $4 million.

The downtown Centennial Building, which has a heritage designation, is being sold to Centennial Heritage Properties Inc.

"We feel the option presented by the buyer is the most beneficial to the province and to the City of Fredericton," Bill Oliver, the minister of transportation and infrastructure, who announced the deal Wednesday in the legislature.

"We feel this is a much better deal for the taxpayers of New Brunswick."

Oliver said the latest plan for the Centennial Building will save New Brunswick taxpayers about $60 million and create more than 450 jobs, he said.

David Coon, New Brunswick's Green Party leader, is happy something will be done with Fredericton's Centennial Building. (CBC)

In January 2017, the Liberals announced a plan to renovate two wings of the building and demolish a third to build a new courthouse. It was to cost $76 million and be finished by 2021.

The back wing of the building was demolished in 2018. After the Progressive Conservatives came to power later that year, Premier Blaine Higgs cancelled further construction.

About $13.05 million had already been spent on the building. With Higg's cancellation of the courthouse project, the property at St. John and King streets, once featured in New Brunswick tourism brochures, started to become an eyesore.

In May, the government issued a request for proposals for private-sector redevelopment of the property.

A government news release said Centennial Heritage Properties has a two-phase plan for the building, which includes 200,000 square feet of residential space and 40,000 square feet for hotel and restaurant space.

Construction is expected to cost $48 million.

Many of the historical elements inside and outside the building will be kept, Oliver said. The building houses numerous pieces of original art, which will be on loan from the New Brunswick Art Bank.

Stephen Horsman, Fredericton-North's MLA, asked the government what it plans to do with the city's courthouse on Queen Street. A new space for the courthouse was included in the former Liberal government's plan for refurbishing the Centennial Building.

Higgs floated the idea of moving the aging courthouse to the Centennial Building in April, before the government asked for private-sector proposals.

"What about the necessity of a courthouse in the capital area?" Horsman asked. "We still need one."

Horsman said 800 to 1,000 jobs were lost when the government decided to scrap the original Centennial plan.

David Coon, the Green Party leader, is glad the building will no longer continue to collect cobwebs and be an eyesore in the provincial capital, but he's also curious about the government's plans for a courthouse.

"There needs to be a new courthouse in Fredericton … and now it's going to cost more money, I think, than it otherwise would have if it had gone ahead as planned adjacent to the Centennial building," Coon said.

Coon said he hopes the new residential space will accommodate affordable housing units.

"The last thing we need in Fredericton is more housing that no one can afford."

Built for civil servants

People's Alliance Leader Kris Austin said he's pleased with the announcement, but he agreed the government isn't off the hook when it comes to renovating the courthouse or building a new one.

The Centennial Building was constructed in 1967, when the provinces and territories received money from the federal government for Canada's centennial.

It was designed as an office building for all government departments of the day.

In 2013, the province moved many offices into Chancery Place across the street, and by 2015, the Centennial Building was two-thirds empty.