Canberra developer Doma Group has almost finished demolishing the Store building and plans to start work on a five-storey car park on the site in March or April.
Excavators had reduced the heritage-listed building in Hunter Street to a brick shell, facade and piles of twisted metal on Friday.
In its place will rise a 678-place car park above a new bus interchange next to the Wickham train and tram station.
The car park will be open to the public until Doma builds the rest of its $200 million residential, office and shopping development on the site.
Newcastle City Council approved a development application for the car park on Tuesday, despite objections from Greens councillor John Mackenzie that traffic arrangements could lead to queues on Hunter Street and inside the parking station.
Cr Mackenzie also moved unsuccessfully that councillors delay a decision on the car park until they have a chance to review a master plan Doma lodged in October for the overall site.