Extensive site at the top of Les Merriennes has the potential to fit upwards of 70 homes.
Heavy plant machinery has been moved on site as work to flatten the old St Martin's hotel gets going.
It has not been used as a hotel for more than a decade and fire has made the buildings unsafe.
However, the 1.25 hectare site has the potential to accommodate around 70 homes, or more than 100 if they are keyworker or sheltered units.
Previous permission for 35 homes on the site has expired and no new plans have been submitted as yet.
A Development Framework, which has been approved by the Planning Authority, specifically protects the majority of trees, saying they add to the biodiversity of the area.
The demolition planning permission granted to the applicant, St Martin's Hotel 1987 Ltd, stresses that trees need to be protected with fencing to ensure they are not damaged at any stage of the process.
Guernsey firefighters tackle round-island walk in full kit
No provider awarded subsidy for seasonal inter-island ferry service
Guernsey's key industry 'stable' in a turbulent world
Pubs can apply to stay open later to show World Cup games
Landowners reminded to clear Guernsey's streams of vegetation
Guernsey homelessness charity 'deeply concerned' at rising support need
Plans lodged to improve Guernsey's sea water Children's Pool
States record £45M surplus, but still warn of Guernsey's funding gap
