Work is well underway on the construction of a new hotel on the corner of Bundaroo and Bong Bong Street.

The property has been best known as the site of the Port-O-Call Hotel in recent years.

However the last beer was served at the hotel more than three years ago and the building was razed to pave the way for a new, improved hotel.

Two generations of the Johns family, that has owned the property since 1987, are hoping the site re-development will revitalise a part of the Highlands history while adding a new family-friendly hotel outlet to the community.

Licensee for the new hotel, Trent Johns said while the former building on the property was the first purpose-built Hotel in Bowral established in 1865, very little of the original structure had remained in tact in recent years.

The hotel was originally named the Prince of Wales but changed to the Imperial Hotel in 1891. The hotel name was changed for a third time in 1975 to the Port-O-Call.

Mr Johns said the building had become something of a rabbit warren impacted by many renovations and modifications during the past century.

He said a verandah, which once extended around the perimeters of the second floor, had long been removed, while another historic feature, a trachyte step made from volcanic rock from Mount Gibraltar, had long been lost in the structure.

However, Mr Johns is intent on reviving any remnants of the hotel's heritage in the new building.

High on the agenda is the return of the businesses longest-standing name, Imperial Hotel.

Meanwhile, Mr Johns and his partner, Kristy Flett, are currently considering the best way to feature the historically significant trachyte step in the new building.

Mr Johns is intent on making the newly developed hotel a valuable social outlet for the people of the Southern Highlands

He said he had enlisted the skills of mostly Highlands-based tradespeople and sourced materials from local businesses wherever possible, for construction of the new building.

The finished product will be a modern, spacious, free-flowing outlet incorporating a sports bar, games room, family bistro, beer garden and a balcony where patrons can relax on warmer days.

Construction of the new hotel is well underway with the owners looking forward to being open for business by about July.