Invercargill's downtown developer has finally agreed a deal to buy buildings and land owned by Reading Cinemas.

Invercargill Central Limited (ICL) confirmed today it has purchased the cinema building at 29 Dee Street, as well as the land at 6-14 Tay Street and 7-9 Dee Street.

But the cinema will remain on site. Reading Cinemas will become a tenant of the landmark block redevelopment. Its building will be refurbished and access will be through the new shopping centre.

Other buildings on the land will be demolished.

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The purchase follows several months of negotiation between the companies. The price and terms of the blockbuster deal have not been made public, but will likely run to millions of dollars.

ICL board chairman Scott O’Donnell said it was a "significant and exciting milestone" for the $230 million development.

"It also means the proposed medical centre and piazza on the Dee and Tay streets corner can move forward to design and development," O’Donnell said.

Mark Douglas, Managing Director of Reading Cinemas, a subsidiary of Reading International Inc, said: "We are excited to be partnering with Invercargill Central Ltd and becoming an integrated tenant of such an impressive and landmark development.

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"Reading Cinemas acquired the previous Movieland cinema in 2004 and over the past 17 years has enjoyed screening the latest blockbuster movies to the community. "

Reading Cinemas will undergo refurbishment works in the new year to further elevate the cinema offering to enhance the movie going experience and compliment the dining precinct, he said.

Demolition of the old remaining buildings on Dee Street and Tay Street will begin as soon as practicable once the necessary consents had been obtained.

Work recommenced last week on huge project, after a delay due to lockdown. Last month, the development reached the halfway stage.

Farmers, Starbucks, Hallensteins, Life Pharmacy, surfwear brand Amazon are all signed up as tenants, along with several other retailers and food outlets.