Seven years after it closed, Auckland's iconic St James Theatre is one step closer to being restored.

The new owners of the fire-damaged building have confirmed plans to restore the theatre over the next four years.

It's music to the ears of Auckland mayor Len Brown, who's been a staunch supporter of the theatre's restoration.

"We have bemoaned, fretted and worried and debated the loss of St James and this is a genuine, realistic and obvious step."

Development director Mike Gibbon admits that could prove controversial.

"It'll be a staged reopening. It'll be a staged refurbishment. We recognise the funding required for this is going to be a sensitive issue."

The new owners are also planning to develop shops and apartments on the site.