AAP
Most of the asbestos found at the site of ASIO's new headquarters has been removed, the Department of Finance says.
The spy agency is building massive new headquarters in the Canberra suburb of Russell, home to many other defence and espionage buildings.
Bonded asbestos was found on the site but has not delayed construction.
"The majority of the soil that was identified for removal because it contained a small amount of bonded asbestos sheeting, has now been removed from the site," a spokeswoman from the Department of Finance told AAP on Wednesday.
"The remainder of this material lies under the existing engineering service lines."
Builders would progressively remove the remaining asbestos during construction, the spokeswoman said,
It was not immediately clear where the asbestos will be dumped although the ABC has reported it will be sent to a landfill site in the northern suburbs of Canberra.
The cost of the building, which will also house the secretive Office of National Assessments, has blown out recently.
The total budgeted expenditure for the building will now be $606.2 million, compared with the $460 million announced in the 2006-07 budget measure," the mid-year economic and fiscal outlook said.
"This funding will provide a high-quality, secure building designed and fitted out for the specialised needs of these intelligence agencies."
Alongside the building fund, the operating budget of ASIO is continuing to grow at pace.
Between 2008-09 and 2011-12 the agency's budget will balloon by $41.2 million, a pattern that developed under the Howard government in the wake of the September 11, 2001, terrorist attacks in the US.
Attorney-General Robert McClelland tried to shift blame for the blowout to the previous government and then declared the cost necessary.
"The building is most certainly justified," he told reporters.