More than 200 council employees will be forced to vacate the site over the coming weeks, after the air conditioning on Levels 1, 2 and 3 stopped working, and fixing it was deemed a health risk.

Replacing the system would "expose staff" to asbestos, and TRC will now begin engaging experts to assess the long-term viability of the ageing Peel Street landmark.

All options are on the table, including complete demolition, TRC's general manger Paul Bennett said.

"Whether that is a strip out of this building and a refit and a reoccupation, right through to potentially a demolition of this building," he said.

"Or, a refit of this building and then using it for other commercial purposes and having a different council facility."

The Leader questioned council about reports of issues with the building's structure, and asbestos, earlier this week.

However, they stated at the time it was just an issue with the heating, only to announce to the public on Thursday they had known about the asbestos for nearly a decade, and it could now cause a major upheaval.

The council also dismissed concerns the presence of the asbestos has caused any health issues for staff or the community.

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"We've known about the asbestos containing material for many years, but it is always contained within the ceiling space," Mr Bennett said.

"The whole building has a false ceiling in it, and the asbestos containing material which is attached to all of the concrete materials in the building has always been there, but it's always been isolated from the staff.

"In this instance, because we have to replace the heating and cooling systems, we have to remove the false ceiling to be able to do that work, and that exposes them to the material."

While a long-term fix could be years away, the short-term cost of relocating staff is expected to cost "several hundreds of thousands of dollars".

All 278 staff that work in the building will need to be moved to other council owned properties, or work from home, with council exploring commercial office spaces within the CBD because they simply don't have the space.

Council owned properties including The Lands building, 474 Peel Street and the Parry House building on Peel Street will all be used to relocate staff.

Ray Walsh House was built in the 1970s, and purchased by council in the 1990s.

Any decision on the building's future will need to go before a council meeting first.

The bottom floor of Ray Walsh House is still open to the public.

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