Sydney-based and -founded software company Atlassian will change the city’s skyline with its new headquarters. It announced yesterday it will construct the world’s tallest hybrid timber building as part of a new Silicon Valley-esque technology precinct around Central Station called Tech Central.

The 40-storey tower is scheduled for completion by 2025 and is rumoured to cost an estimated $1 billion. Standing at around 180 metres tall, the finished building will overtake Vancouver’s Terrace House, currently under construction, which was slated to be the world’s tallest hybrid timber building at 71 metres.

New York-based SHoP Architects will oversee the build, and Sydney practice BVN has been enlisted as the building’s design team. The building will be at the Railway Square end of Central Station and incorporate the Parcels Shed, which is currently a YHA but from 1912 to the early 1980s, was a place where parcels were delivered and dispatched. Backpackers need not fear, though – the YHA will be integrated into the new building, with around 480 beds.

“Sydney has the potential to be one of the world’s leading technology cities and the creation of a tech precinct sends a loud signal that we’re in the race to take a slice of the world’s most valuable market,” said Atlassian co-founder and co-CEO Scott Farquhar in a statement. “That’s an exciting place to be.

“This building will breathe new life into this part of Sydney. It’s an amazing design. We’ve searched the world to find the best architects and engineers to put it together.”

In-keeping with Atlassian’s goal of operating on 100 per cent renewable energy and net zero emissions by 2050, the building will aim to generate 50 per cent less carbon during construction (compared with the construction of similar buildings) and consume 50 per cent less energy while in operation than a conventional building.

To achieve these targets, it will have solar panels integrated into its facade, use natural ventilation, have a self-shading system to regulate temperature and incorporate terraced gardens that will be temperate year-round.

“The space that we are building will be highly sustainable and highly flexible,” says Farquhar “It will be purpose-built for the future of work, for tomorrow’s world, not today’s.”

Tech Central is part of a larger revitalisation project of 24 hectares of space surrounding Central Station. The plan is to eventually link Ultimo with Redfern on the CBD’s southern edge, improve access and transport to an area divided by rail lines, and provide green space.

Atlassian will lodge its development application in coming months with a plan to begin construction next year.