Control Demolition Group is carrying out the work to demolish the 40 year old building, which dominates the corner between James Street and The Strand in Liverpool city centre.
The North West Development Agency, which owns the building, has confirmed demolition work is being carried out but said there is no plan for development.
The NWDA said it will tidy up the site ready for potential development in the future once the building has been demolished.
The upper floors have been vacant for a number of years following the closure of a women-only health club, known as the Figure Factory. The Coopers Emporium bar previously occupied the ground floor of what was once a hotel.
In the past week, scaffolding had been put around the building to begin the demolition.
The site has been earmarked by Liverpool Vision, the economic development agency for the city, as a prominent location for development.
Kingston House is located opposite Neptune and Countryside's Mann Island apartments, due to complete this summer, and near to Liverpool's World Heritage waterfront site and new Museum of Liverpool, due open in 2011.