The derelict Arthurs Point Tavern - which was to be demolished in December - has had a Christmas reprieve, but owners still plan to carry out the works next month.
Co-owner Rick Pettit, of Queenstown, said the works were waiting on a demolition consent.
The Queenstown Lakes District Council wants to use the Gorge Rd site for works to realign and widen the nearby one-lane McChesney Bridge to two lanes.
"... they put the road realignment through where the pub currently sits, and then where the road currently sits is swapped with us and we take that and add that to the existing carpark area," Mr Pettit said.
The agreement was still being finalised, and Mr Pettit believed the Queenstown Lakes District Council wanted to start road construction in March.
