Housing Minister Phil Twyford says the Government and Housing New Zealand will work towards an "exciting, ground breaking project" in Auckland's CBD.

The current structure at 139 Greys Ave, near Aotea Square in Auckland's city centre, will be redeveloped into a 280-unit complex, aimed at providing a home for the people who need it most.

"It's about providing a warm dry secure over people's heads when they need it," Twyford said.

Tenants are expected to move into the new complex in 2021 and a Housing New Zealand office will be located on site.

The block of state-housing flats have been in a state of disrepair for years.

The 3918sq m block was once labelled a "slum" and there were reports of gang activity, stinking rubbish, dangerous flooring and filthy public areas, as well as a number of security concerns.