The $2.4 million upgrade of the community-owned hospital in Balclutha is nearing completion as work begins on the final stage.
Clutha Health First (CHF) is undergoing its first major upgrade, split over five stages, since the centre opened on December 1, 1998.
Demolition of the old Findlaters building in Clyde St began on Saturday and finished on Monday.
Chief executive Ray Anton said building code changes meant the building was not suitable for renovation. The space will become a larger car park, in front of the new main entrance and some vehicles will be allowed to exit from the car park on to Clyde St.
Later this week, the hospital's building committee would look at the empty site to check levels and discuss the car park's design, Mr Anton said.
The interior work of stage five has also begun. The physiotherapy department has been relocated to the Clyde St side of the building and the former physio space is being gutted to make way for a new accident treatment area.
Mr Anton said stage four was complete. New administration offices were finished and staff had moved in by last Monday.
One main reception area had been built and a patient lounge revamped. Some remedial work was required from earlier stages, including the staff and emergency services car park at the rear of the building.
Access from Clyde St is via the walkway down the side of the building to the main reception area and from Charlotte St down the alleyway to the main reception.
The upgrade is due to be completed by the end of next month.
Increasing demand for space, especially in the GP area, had required the facility's extension, Mr Anton said.
Key developments included an extension of the GP facilities to allow for extra consultation rooms; one main entrance and waiting area; easier access to GP, lab and X-ray services; outpatient consultants and an inpatient ward.