Auckland's historic Birdcage Tavern will be returned to its previous site after being shunted up Franklin Rd while the Victoria Park motorway tunnel is dug.

A resolution of technical obstacles means it can be returned to the position it has commanded for 125 years, the Transport Agency said yesterday.

The agency earlier resisted calls for the old pub to be returned to its old location, saying it would be prohibitively expensive to return the 600-tonne structure from a site 40m up Franklin Rd, to which it will be moved on "runway" beams in September.

That was mainly because the southern entrance to the $406 million tunnel would have to be redesigned so the roof could support the hotel, it said last year.

The agency said in February it would return the hotel to within 10m of its original position.

But engineers from a Fletcher Construction-led contracting alliance have since found a way to fully reinstate the building by flattening the angle of a main sewer which also needs to fit over the southern portal.

They have assured agency state highways manager Tommy Parker the two moves can be done for $2.5 million, compared with an initial budget of $8 million to $10 million for a one-way shift.

Landscape design specialist Richard Reid, who has campaigned for full reinstatement of the Birdcage since before resource consent hearings in 2006, said the development was "an outstanding result for the city".

It would give a restored Birdcage pride of place above a public plaza which would set the stage for a heritage precinct to provide an outstanding western gateway to central Auckland.

Leaving it 10m in front of its original position, and at an altered angle, would have "deadened" the space by putting it too close to Victoria St.

The Transport Agency has also agreed to work with Auckland City to restore Victoria Park's historic Campbell Free Kindergarten, which Mr Reid says is another important part of a heritage precinct.

Wellington consultant structural engineer Adam Thornton, who has moved several other large buildings and designed the Birdcage operation, said the new plan was the most desirable in heritage terms and was welcomed by the Historic Places Trust.

He said most of the cost was in strengthening the two-storey brick building's earthquake resistance, and installing four long beams along which to move it up Franklin Rd on a steel sliding surface, teflon bearings and new concrete foundations.

Tunnel project engineer Bryce Irving said the hotel would remain parked up Franklin Rd for three to four months before the southern section of the motorway tunnel would be ready to support its reinstatement.

A web cam and other electronic equipment is being considered so the public can watch the move.

But calling the hotel the Birdcage is now frowned on. The Transport Agency wants people to call it the Rob Roy - the name it was given when it was built in 1885 on what was then the Freemans Bay foreshore.

Although it is taking five months to prepare the hotel to be shifted, the move is expected to be take only a day.