Chief operating officer John Patrick yesterday gave an assurance the university's plans did not involve demolition of the two-storeyed 125-year-old building.
"Absolutely not. I've heard the rumours that it's going to be demolished and all sorts of things. But absolutely not. It's a lovely building. It's quite historical in some ways."
The building, which consists of two ground-floor shops and two upstairs flats, was built in 1885 for Donald Malloch, of Waikouaiti.
It was designed by New Zealand's foremost Victorian architect Robert Lawson, who was also responsible for First Church, Knox Church, the Municipal Chambers and Otago Boys High School.
Over the years, it has been a cafe, grocery store, locksmith and gunshop.
The building has been vacant since the Green Acorn Cafe relocated to Albany St in 2008.
Mr Patrick said the university's plans would "enhance the use of the building".
"That's why it's taken us a while to decide what we are going to do.
"It's an important corner; an important part of the campus really."
