Woden will keep its workforce of Health Department public servants after the federal government agreed to a lease fastening them to the struggling town centre for another 16 years.
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The department's deal with its landlords at the Sirius office block will buoy businesses that have watched bureaucrats from other federal agencies leave the ailing commercial hub and move to Canberra's city centre and parliamentary triangle.
Health officials working in the building are likely to have new, "flexible" workspaces after the department secured renovations from property company Mirvac in agreeing to extend their lease to 2035.
The Department of Health negotiated the new agreement with Mirvac six years before its lease expired at the office block purpose-built for the federal agency in 2010.
The deal will keep more than 3000 Health Department public servants working in the Sirius building at 23 Furzer Street, alongside another 530 of its bureaucrats in the adjacent Scarborough House on Atlantic Street.
Woden Valley Community Council president Fiona Carrick said the department's decision gave certainty to small businesses in the town centre.
"This decision provides confidence to the community, public and private sectors that Woden has potential to be a vibrant social and commercial hub of the region," she said.
"This could provide confidence for other large public sector tenants to move into Woden."
A Health Department spokeswoman said the early lease renewal would let it refurbish the Sirius building in stages. The department would consult with staff about its new workspaces.
"A thorough analysis of the department’s future office accommodation needs and the Canberra office market was undertaken in consultation with the Department of Finance prior to the lease being renewed," she said.
The department had made no decisions regarding the design of new workspaces inside the building.
"The program is at its early stages and is currently working through a co-design process with staff that will assist in establishing the new workspaces."
Mirvac flagged the refurbishment would create a more "flexible" workspace for Health, one of its largest office tenants.
The departure of other federal agencies has struck Woden in recent years as the government consolidated its office spaces in an attempt to find savings.
Lovett Tower in Woden lost the Department of Veterans' Affairs to the Gnabra building on Genge Street in Canberra's city centre. The Australian Public Service Commission swapped its Furzer Street offices for a slice of the more prestigious Treasury building in 2017.
Mirvac Property Trust executive Andrew Butler said the extension of the Department of Health lease was testament to the building and its location.
The value of the extended lease is yet to be announced.
