The old BP building was levelled on Wednesday after about 50 years as a service station to make way for the new building expected to be completed in February next year.
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Late last year Mid-Western Regional Council approved the demolition of the Church Street site as part of a $2.5 million redevelopment.
Councillors unanimously voted in favour of the application to demolish and reconstruct the existing building and a disused workshop.
Four existing fuel storage tanks and a waste oil storage tank will be removed as part of the development.
A new building, with a floor area of 122.4 square metres, will be built with a new five metre high canopy, new signage and new fuel tanks and pumps.