The contractor will use several local firms to help it carry out a comprehensive renovation of the vacant Nazareth House facility on Durnford Street.
Residents were moved out of the home in February this year.
They will return to a larger, more comfortable and modernised environment next summer after BAM builds a large timber frame on the second floor of the existing building to increase the capacity of the home from 33 to 44 beds.
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The existing external walls will be retained and internally clad with insulated plasterboard, while new composite aluminium/timber windows will add to the warmer, more homely environment.
Client Sisters of Nazereth has plans for a further phase of work that will increase the capacity of the site further with additional buildings at a future date.
BAM project manager Peter Buchanan said: "We are pleased to bring our skills and experience to help improve the environment for residents of Nazareth House.
"Since the residents moved out, the building has been completely stripped out leaving only a shell of concrete floor and masonry enclosures.
"When we have finished this will be a very pleasant, comfortable place to live, making the most of its views over Plymouth Sound."
(CD)
