Shepherd Construction is halfway through demolition of sections of the library in Liverpool city centre dating back to the 1950s and 1970s.
The sections were originally built following Second World War bomb damage and were suffering from damp and a leaking roof.
Shepherd Construction is using specialist equipment to separate the side walls of the library from the adjoining buildings, which are occupied by the World Museum Liverpool and the Walker Art Gallery, while at the same time protecting the historic façade of the library on William Brown Street and the adjoining Picton, Hornby and Oak buildings.
With the walls now separated, the main contractor is taking down the existing structure to pave the way for the new section of the library to be constructed, designed by architects at Austin-Smith:Lord.
This will include a café atrium and roof terrace and provide storage for the Liverpool Record Office where archives and some of the city's most historic treasures from the last 800 years will be housed.
Restoration work of the Grade 2-listed sections of library is also continuing with external scaffolding and a temporary roof structure now erected to the Picton Library and removal of the existing zinc covering to the dome roof now underway.
Peter Millett, west division managing director at Shepherd Construction, said: "The deconstruction stage has been an extremely complex part of the programme as we have had to protect the façade and neighbouring buildings, particularly considering the priceless artefacts and paintings on the walls of the museum and gallery just feet away from where we have been working on the separation of the library's structure. To help us we've enlisted the latest equipment that has been stationed in the neighbouring buildings to monitor vibration levels.
"With the separation now complete we are expecting to have the rest of the area cleared by June 2011. Construction of the new library will be carried out in conjunction with the historic restoration work, with the project due to complete in November 2012."
Work on the library, which lies within Liverpool's UNESCO World Heritage site, will see a full restoration of the parts of the building dating back to 1860 and the Hornby Library and Oak Reading Rooms being fully open to the public for the first time.
The revamped Central Library will include IT facilities that allow young people to download music and games onto MP3 and MP4 players, with wi-fi and access to computers.
Joyce Little, Liverpool City Council's head of libraries, said: "The restoration of Liverpool's Central Library has taken more than ten years in the planning, and it's exciting to see the project move to the next stage."
The new Central Library is now scheduled to reopen in spring 2013, having originally been scheduled for completion at the end of next year.
Inspire Partnership, a joint venture between Amber Infrastructure and Shepherd Construction, was originally delivering the £50m project.
Liverpool City Council agreed a 25-year deal with Inspire Partnership, with Shepherd Construction holding a 19.9% stake and Amber an 80.1% share.
In April this year, however, International Public Partnerships bought the balance held by Amber as part of an acquisition of nine projects totalling £10.8m.
Cofely is providing facilities management services.