Bowmer and Kirkland (B&K) have started demolishing the former Post Office and Royal Mail building, along with the former Dawson and Sanderson travel agents on Keppel Street, to clear space for a new transport interchange to be built.
The council is working alongside its development partner, Muse Developments and Nexus, to develop the infrastructure project.
The demolition programme will take around three months to complete and forms Phase Two of the £100m masterplan. Work to build the interchange is scheduled to start on site next Spring, which will bring together a new bus interchange and relocated, refurbished Metro station.
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Council Leader Iain Malcolm said: "Phase Two of our masterplan is gathering pace and people will start to see physical changes happening around the town now.
"We've got hundreds of thousands of new visitors attracted to the town centre, thanks to The Word and our other regeneration successes on the Foreshore and Riverside.
"Creating a high quality sense of arrival; enhanced public transport facilities and improved connectivity is crucial."
David Wells, Regional Director at Muse Developments, said: "The demolitions are a major step to clear the way for the construction of the transport interchange - it's a complex project for which the background work has been going on for many months so it's great to see the construction phase now getting closer.
"The end result will be a superb and modern public transport facility that will benefit both local residents and visitors alike."
Managing Director of Nexus, Tobyn Hughes, said: "These demolitions mark the start of the work to provide South Shields with a modern and vibrant new bus and Metro interchange, which we believe will help attract more people to the town centre for shopping and leisure.
"We are excited to be working alongside South Tyneside Council and its partners to deliver this project, which will see Metro and bus facilities in South Shields transformed alongside the rest of the town centre."
(LM)
