Warrnambool's Salvation Army is expected to have a new home within 12 months.
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Major Brett Allchin said a permit to demolish the building at the former indoor tennis centre on Mortlake Road had been obtained.
The purpose-built facility, expected to cost more than $5 million, will comprise a main worship room, a multipurpose room and youth hall, a parents' room, play area, kitchen, servery and storage rooms, a staff lunchroom and office and interview rooms.
Mr Allchin said the Salvation Army outgrew its base on Lava Street about a decade ago.
"We're very excited," Mr Allchin said.
"It's been a long journey for us.
"About 11 years ago we realised the current building was not meeting our needs."
Mr Allchin said a number of options had been explored, including refurbishing the existing building at the new site.
However, the decision was made to build a new facility to meet the community's needs.
Mr Allchin said staff were "bursting at the seams" at the Lava Street site.
BDH Constructions has been appointed to complete the project.
"We're proud to work alongside BDH Constructions because they endeavour to use local subcontractors," he said.
Mr Allchin said he believed the existing building would be demolished in the coming weeks.
He said the new facility was being built thanks to the fund-raising efforts of local residents and contributions from community members keen to support the Salvation Army's vision.
"It will be a new hub to support and bring hope to those who need it most," Mr Allchin said.
He said the additional space would allow residents to use the facility as a drop-in centre.
Mr Allchin said the new facility would also have improved access.
He said he believed the new facility would allow the Salvation Army to help live up to its motto and change "one life at a time".
Mr Allchin said the Salvation Army's Lava Street facility would be sold, with it expected to be listed in the coming months.
He said the organisation was in the process of selecting an agent to list it with.
"We've seen a few project schedules and it the majority have a completion date of late May, 2023," he said.
The Salvation Army bought the former indoor tennis centre site in 2016.
The initial plan was for the existing building to be extended, not demolished.