HM Revenue & Customs is poised to move thousands of staff to the new Three Snowhill office development in Birmingham's business district.
Reports suggest the Government Property Unit is eyeing the landmark building next to Snow Hill station as it looks to consolidate around 170 tax offices nationally into 13 regional hubs.
Sources have confirmed that HMRC is eyeing the third phase of the office estate but it is unlikely to take the entire 420,000 sq ft in the 16-storey building.
HMRC announced a year ago it was planning a major merger of its office estate to bring its 56,000 staff together into 13 hubs with thousands of redundancies predicted.
Birmingham is likely to be the front runner for the West Midlands due to its ability to offer large office space as up to 3,400 staff are expected to be based there, bringing together 16 offices from across the region.
Three Snowhill is currently the largest speculative office development being constructed outside of the capital and its two sister buildings count KPMG, Barclays and HS2 among their tenants.
A report in Property Week suggests HMRC could eventually occupy one million sq ft of office space across Birmingham and include staff from other government departments.
A HMRC spokesman said: "There are a number of potential options that we are currently considering for the location of all our new regional centres.
"We'll only confirm a particular development after we have told our people who we have been consulting with throughout this process."
Other developments in the pipeline which could attract the Government's eye include Paradise, where PwC is so far the only confirmed new tenant, Arena Central where HSBC UK will be based, and Cornerblock in Cornwall Street whose proximity to Three Snowhill could prove preferable.
HMRC's then chief executive Lin Homer said last year: "HMRC has too many expensive, isolated and outdated offices......the new regional centre in Birmingham will bring our staff together in a more modern and cost-effective building in an area with lower rent.
"It will also make a big contribution to the economy of the West Midlands providing high-quality, skilled jobs and supporting the Government's commitment to a national recovery that benefits all parts of the UK."
Three Snowhill is being led by M&G Real Estate and Two Snowhill developer Ballymore, after the pair struck a £200 million deal earlier this year, and built by BAM Construction.
It is expected to be able to accommodate around 4,000 office workers when it completes in 2018.
Property consultancies JLL and Savills are working for the Government Property Unit and and Three Snowhill respectively - both declined to comment.
