The potential danger has led to a land-use consent being issued by the Dunedin City Council for the removal of the ailing raywood ash tree on the corner of Hanover and Castle Sts.
A report by consultant arborist Mark Roberts recommended an original application to prune the tree be switched to push for removal instead.
The report said the tree looked to be in poor health compared with what would be normal for a healthy specimen of the same age.
Dead branches were hanging over car parks and the footpath below, and dead sections of the tree were above the entrance to the neighbouring Vehicle Testing New Zealand branch.
However, he saw no structural issues to suggest that whole tree failure was likely to happen soon, he said.
"There is a relatively high probability that deadwood will fall from the tree and land on parked cars."
A reassessment of the tree by council staff in the wake of the report found its deteriorating health had greatly reduced its amenity value, and pruning of dead branches would lead to the tree becoming an eyesore.
The tree is located on land owned by the Ministry of Health.
A ministry spokesman was yesterday unable to confirm when the tree would be removed.
