Demolition has finally started this afternoon to remove buildings in the Invercargill CBD to make way for the multi-million dollar CBD development.

The facade of the old Cambridge Place Arcade was the first to face the demolition equipment, with bricks crumbling to the ground at just after 3pm.

The start of the demolition comes just two days after an interim High Court injunction filed by Nelson-based property manager Gaire Thompson was lifted on Tuesday in Christchurch.

The $200 million development is being completed by HWCP, a joint venture between the Invercargill City Council and the Richardson Group, and is expected to take up to three years to complete.

HWCP Group director Scott O'Donnell said it was both 'stupid' and 'painful' the process had taken so long to get to this phase but it was 'gratifying' to finally see the rubble on the ground.

"It’s great to see actual real action because all the work (so far) has been done by paper. Lots of plans, lots of discussion, lot of meetings. Now you’re finally seeing action and action is what we need. Action creates an outcome."

HWCP Group director Scott O'Donnell (yellow hat) watches this demolition begin. PHOTO: Ben Waterworth

He said the demolition period was expected to take up to six months, although he hoped more support may be brought in to speed up the process given the delays had already added several months to the project.

Invercargill deputy mayor Toni Biddle was on hand to witness the start of the demolition and said it was the biggest thing to happen to the city in decades.

"I think we will look back at the success of the development. I think people are starting to think differently about where they want to live with everything that is going on in the world and I think we have a lot to offer. I think this is the start of something really brilliant."

Demolition will continue from the current car park space in the centre of the block and contractors will work towards Kelvin Street clearing the east end of the block.

Buildings in the block which won't be demolished include the Kelvin Hotel, Reading Cinemas and Bank of New South Wales building.

Two building facades on Esk Street will also be retained.

Mr O'Donnell said they would continue to work with the few remaining business who were operating near the demolition to ensure they were kept up to date with the progress.

"We work closely with the retailer group around here to make sure we all know what is happening so what they do as retailers is not impacted."