The landmark two-storey brick building in Sewell St has been vacant for years, having previously housed the Department of Lands and Survey, Lands and Deeds and the Magistrate's Court.
It has had a string of private owners since, but promised restoration plans have failed to eventuate.
In 2020, when Conservation Minister Eugenie Sage announced the Government had purchased the building, which it had vested in Heritage New Zealand, she said she looked forward to the building once again being a hub for government on the West Coast.
"I'm pleased that the 85 Department of Conservation permanent staff based in Hokitika will remain in the heart of the town," Ms Sage said.
But DOC said today it would no longer be entering into an arrangement with Heritage NZ to lease the property.
"Our operational requirements in terms of fit and occupancy have changed which means the building is no longer suitable as a DOC Te Tai Poutini Western South Island regional office," operations director Mark Davies said in a statement.
"We are still absolutely committed to having our regional office in Hokitika. However, we will now be looking for office space which better suits our needs."
Heritage NZ had confirmed the change in tenancy plans would not affect its work to seismically strengthen and upgrade the category 1 listed heritage building.
A formal letter from DOC to Heritage NZ confirming the decision was tabled at a Heritage NZ council meeting yesterday.
Mr Davies said the department had begun the search for more appropriate premises to tenant. It currently has staff in three buildings in Hokitika and also occupies a workshop site.
The government building was designed by government architect John Campbell in the Edwardian Baroque style. It is one of the largest buildings in Hokitika.
Constructed in two phases between 1908 and 1914, it was originally designed as a keystone project in response to the demand for more office space for the rapidly expanding public service of the time.
The Heritage NZ restoration was due to be completed in 2025, funded through the Government's Covid-19 Response and Recovery Fund.
