One of Auckland's oldest hotels is going for a 40-metre, $2.5 million ride as part of a new tunnel construction to ease congestion on one of the country's busiest stretches of State Highway 1.

The Birdcage Hotel will be moved up Franklin Rd for about two years and then moved back close to its original site when the new motorway tunnel to be built under Victoria Park is complete.

The tunnel will provide three lanes for northbound traffic and the existing viaduct over Victoria Park will be converted to provide four lanes southbound.

The Transport Agency's Auckland state highways manager, Tommy Parker, said the historic tavern, one of Auckland's oldest buildings, sat directly above the planned tunnel's southern portal. The section of motorway carried 200,000 vehicles a day.

The hotel was originally to have been moved permanently to a new site 40m away but Mr Parker said a plan had been devised to return the building safely to near where it is now.

The tavern will be moved by the same company which moved the historic pumphouse in the Bay of Plenty gold mining town of Waihi and the Museum Hotel in Wellington.

Mr Parker said the brick building would be reinforced and placed on runway beams just below ground level before hydraulic arms pushed it gently and slowly along the beams up the road.

Once the tunnel was finished it would be pushed back to almost its identical position.

Mr Parker said the fate of the Birdcage had been the subject of robust discussion and consultation with the community and key stakeholders, including Auckland City Council.

The Transport Agency had considered leaving the tavern in the temporary site, or shifting it elsewhere in Victoria Park.

"We're delighted that we can make significant improvements to Auckland's motorway network with the Victoria Park Tunnel and also preserve an important heritage building and ensure it remains a focal point for the community," said Mr Parker.

The relocated Birdcage was expected to be part of a new plaza development.

A hotel has been on the site since 1865 when a wooden hotel, called the Rob Roy, was built. Patrons could reach the hotel by road or water because it was so close to the Freemans Bay shoreline.

The existing hotel building was built in 1885. In 1969, the east wing was extended, and the hotel's name was later changed to the Birdcage.