Tamworth Regional Council mayor Russell Webb confirmed Ray Walsh House on Peel Street will be totally restored, after staff vacated the building last month and assessed options for its future.

The hunt for a temporary home has been narrowed to the old Northern Daily Leader building on Marius Street, with negotiations for a three-year lease agreement for levels 2, 3 and 4 "continuing".

"Our plan at this point is to get this building decontaminated, cleaned up, stripped out and completely refurbished and the intention is that the council move back into this building within three years," Cr Webb said.

"The building will have to be completely stripped out, it will have to be intrinsically cleaned. Everything that's inside, every item will have to come out."

Council is yet to contract a company to do the work, the mayor said, but it's expected to be a lengthy process which could take "three years, if not more".

"The building will be sealed from the inside, and there'll be negative pressure within the building," Cr Webb said.

"When the contractors that are engaged come in, they do that in a very professional way.

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"It's been done in hospitals in the past, they've done it in schools. We know they will do that job, and there'll be no risk to the public."

More than 200 council employees were forced to vacate in June, after the air conditioning on levels 1, 2 and 3 stopped working. Fixing it was deemed a health risk due to asbestos containing material within the building.

Staff have been working in council owned buildings within the CBD, from home, or on the ground floor of Ray Walsh House.

The preferred option is to move into the historic Leader Building on 179 Marius Street, which underwent a complete commercial refit by Lionheart Property Development five years ago.

Cr Webb said council identified the space is "fit for purpose" to house councillors, directors, the general manager, mayor, regional services and communications staff.

He said the cost of the lease is "commercial in confidence" and would not be made available to the public.

"It's money that we didn't want to spend, but it's money that we've got no choice in spending," he said.

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

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