Go Bus chief operating officer Nigel Piper said the lease for the site had expired and the Dunedin City Council (DCC) wanted to use it for other purposes.
A DCC spokesman said the council was working with Kāinga Ora as it considered a potential purchase of the Princes St site.
Mr Piper said there was no deadline for vacating Princes St but because of the limited time left at the site, it had made plans to move to the former PlaceMakers site in Portsmouth Dr.
Placemakers moved to the old Carisbrook ground less than a year ago.
Go Bus was looking to relocate part of its business in the next six months, Mr Piper said.
"The current plan is for our engineering services to relocate prior to Christmas, with operations moving early next year once construction is completed.
"It won’t be wholly ready until early next year due to the construction required."
Go Bus would lose some efficiency by moving to the new location.
"Princes St was an ideal site for the bus depot due to its central location and proximity to existing bus routes."
The new site in Portsmouth Dr was out of the city centre but driver duties were being rewritten to accommodate the additional travel required.
Dunedin Tramways Union secretary Phillip Mathews said the union was disappointed with the decision to relocate the bus depot.
"We’ve been fighting to stay there ... because as a depot it’s probably the best place for the buses to be and it’s ideal for everything else.
"But it’s been taken out of our control.
"It’s a hindrance for everybody to do all of the changes."
Mr Mathews said the Princes St depot offered facilities for bus drivers in a convenient central location.
"Our biggest concern is toilet facilities because we use the Go Bus depot on the way for our changeovers.
"I stop the bus outside the depot, go to the toilet, go and get some more water and all those types of things, and now we’ve lost all that."
There were some unknowns for bus drivers, such as parking, at the Portsmouth Dr site and it would take some getting used to.
"For me it’s like changing schools. You have got to get used to everything else."
Kāinga Ora Otago, Southland and Canterbury regional director Kerrie Young said the organisation was continuing to work through a due diligence process for the Princes St site.
