Expect to see a number of Crown agencies housed under one roof in Whanganui soon.

While the Government is staying tight-lipped, the Government Property Group confirmed it had selected a preferred supplier and a conditional contract was in place.

A spokeswoman for the Government Property Group said the contract was likely to go unconditional within the next three to four weeks, "once certain aspects of the contract have been finalised".

"Once the contract is unconditional, Government Property Group will be in a position to release further information to the market," she said.

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While they will not give details of where the office block will be built, sources have told the Chronicle the complex will go up at 161 St Hill St, on vacant land between the former Powerco building on the corner of St Hill St and Gutyon St, and the Energy Direct building on St Hill St.

The property's owner does not live in Whanganui and the land is used for private parking.

The Chronicle has been told the Ministry of Social Development has keyed the site for new offices that will be home for Work and Income, CYFS, senior services and youth services staff.

It's understood that Work and Income, now based at Terrace House, 113 Wicksteed St, have been told they will be relocating within 18 months. CFYS staff are working from Ingestre Chambers at 74 Ingestre St.

The move does not come as a surprise with the Government already announcing moves to make better use of office space by sharing facilities.

State Services Minister Paula Bennett said recently that housing government agencies under one roof had saved taxpayers $57 million over the past financial year.

The latest Crown Office Estate Report shows the Government is continuing to reduce the Crown's property footprint while ensuring its employees are in modern, safe and healthy work environments.

Mrs Bennett said as at June 30 last year the Crown had pared back its office space by 30,997sq m. This takes the total reduction to 152,293sq m since 2011, and a saving of $132 million.

She said more efficient use of space meant the Government was on track to save about $110 million annually by 2023.