Construction started today on a new $116 million Auckland University building opposite Auckland City Hospital in Grafton.

The building by Hawkins Construction is for the university's School of Medicine and its School of Population Health, to be transferred from university's Tamaki Campus and the Auckland District Health Board support building.

The construction site is on the corner of Park Rd and Park Ave and the new building will be 19,500sq m and have six levels, of which two will be underground.

"The upper three levels will accommodate office and open plan activities; the middle levels will be dedicated to student-focused activities - including flat-floor teaching spaces – and the lower ground floor will be dedicated to clinic space," Hawkins said.

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The block is due to be completed in January 2020 and Hawkins said it had also won the contract to build the new $170m university engineering building, an 11-level block now under construction and also due to be occupied by 2020.

Australian infrastructure and mining firm Downer EDI paid A$55.4 million ($61.2m) for Hawkins this year, which was in need of capital at the time of the purchase.

The sale price, which was withheld at the time of the deal in March, emerged in Downer's annual report released in August, showing the Sydney-based company paid A$52.6m ($58.2m), with the gross consideration including A$2.8m ($3m) cash balances acquired.

At the time of acquisition, Hawkins had negative working capital leading to a negative net asset value of A$16.3m ($18m), resulting in Downer recognising A$71.7m ($79.4m) of goodwill in the deal.