Otago conservator Jeff Connell defended the move after Otago MP Jacqui Dean questioned the spending when "Doc is struggling to maintain tracks and pest control efforts are running amok".
She was also concerned a further $400,000 would be spent on landscaping and a building refit, she said.
"Surely, this is an extravagance that Doc can ill afford when earlier this year it was talking about an $8 million budget blowout and possible job losses for frontline staff.
Couple that with recent Official Information Act revelations showing Doc has spent $4 million establishing a new marketing and communications group and questions must be asked about how our conservation budget is being spent."
Mr Connell said Cavells was an existing commercial building on reserve land administered by Doc, so it would avoid land occupation costs and future rent increases.
It had existing tenants who would remain and pay rent to the department.
The latest rent increase was 11% for Doc's Shotover St office and 27.5% for Doc's workshop on Gorge Rd, where a long-term lease was not available, Mr Connell said.
The refit was allocated $400,000 and a further $500,000 was earmarked build a new workshop at Cavells and to improve parking and public amenities.
Mr Connell said the capital costs would not reduce the department's operational budget.
"Queenstown is an expensive place in which to do business, but Doc needs to do business there. Staying where we are is not an option and the option we have chosen protects our ability to continue all current field programmes.
"The $8 million was a projected budget deficit that needed to be managed to zero and the $4 million for the marketing and communications group was accumulated from existing head office budgets for units that have been reformed into that group."
