Designed by David Chipperfield Architects, 35 Lincoln's Inn Fields will become the Firoz Lalji Global Hub, housing the Firoz Lalji Institute for Africa and additional space for other LSE departments.
McLaren and LSE said it is expected to be the largest Passivhaus retrofit building in the UK.
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McLaren will retain around 60% of the original 1950s building after demolishing the top three floors and the roof plant enclosure, replacing them with a lightweight cross-laminated timber extension. This will increase the building's surface area from 9,856 sq m to 11,848 sq m.
The contractor will also remove an infill structure at the core of the building to free up the floor plan and create an atrium. A new ground floor and partial first-floor slab will provide level access into the building.
The new hub will also have "green and blue roofs" with PV panels.
'Redefining standards'
In addition to Passivhaus certification, the project is aiming for a BREEAM Outstanding rating and WELL Platinum.
McLaren said it has worked with consultancy Buro Happold to reduce the embodied carbon footprint of the project. This includes re-evaluating material choices, omitting unnecessary components and integrating low-carbon alternatives where possible.
McLaren Construction's managing director for London and South, Darren Gill, said: "Retrofit techniques have advanced to the point where we can remodel 70-year-old buildings to create world-class spaces at the same time as minimising both the embodied carbon in a construction project and the future operational carbon emissions."
Julian Robinson, director of estates at the LSE, said: "This transformative project represents a major milestone in LSE's ongoing commitment to innovation, sustainability and academic excellence. It sets out to redefine standards in building reuse and sustainable development, targeting high accreditations alongside ambitious embodied and operational carbon targets."
The project is expected to be completed in 2027.
