Prime Minister Tuilaepa Sailele Malielegaoi said the central building, which was built in 1902, was riddled with termites and had been condemned.
The top floor of the new building would be a hotel and the ground floor would be turned into stores and a museum, he said.
But AUT University's Professor of Pacific Studies, Tagaloa Peggy Fairbairn-Dunlop, said the German-designed building was a key part of Samoa's history.
