Friday morning workers began demolishing parts of the old Public Health Services hospital.
The hospital shut down in 1981, and has since been defaced by vandalism and graffiti.
The original building, which dates to 1932, will be preserved and transformed into 154 apartments, as part of a larger, two-year redevelopment project.
"There will be a hiking trail, a biking trail as well, that goes from Baker Beach to the Broadway Gate. There will be brand new landscaping. There will be a community of people living here," said Presidio Trust Executive Director Craig Middleton.
Next Tuesday officials will hold a public meeting on separate plans to build a major art museum, hotel and movie theater complex elsewhere in the Presidio.
