The reconstruction of Nepal's consulate general in Lhasa, Tibet autonomous region, officially began with a ceremony on Sunday.
Assistance will be provided by regional authorities.
Similarities in culture, along with their location in the Himalayan mountain range, have cemented a close friendship between the residents of Tibet and Nepal over thousands of years.
Built four decades ago in Lhasa, the Nepal consulate has played a pivotal role in trade, connectivity and exchanges. It is the only consulate in Tibet.
Chen Sheng, an official from the Tibet Foreign Affairs Office, said the current building is too old for satisfactory use and should be demolished.
During the demolition and reconstruction work, which is expected to be completed within two years, the consular staff will work from the Tibet Hotel in Lhasa.