KANSAS CITY, Mo. -- The federal General Services Administration has approved a $200 million plan to redevelop the city's old main post office.

The proposal, which calls for moving 5,000 IRS employees in the Kansas City metropolitan area to the post office, still must be approved by the Office of Management and Budget and Congress.

The IRS operates large offices in east Kansas City, in the Kansas suburb of Overland Park, and in scattered offices elsewhere. Local leases will begin expiring in 2007.

Stephen A. Perry, the top administrator for the GSA in Washington, told Sen. Kit Bond in a letter released Saturday that he supported the project.

"GSA believes that this project could represent a multiple win situation benefiting the IRS mission, clients and employees, the people of Kansas City and the American taxpayer," wrote Perry, the federal government's chief landlord.

Bond, R-Mo., who has been pushing the proposal, said the GSA's approval brings the project "one step closer to reality."

"Much work remains, but I am very pleased with the progress we are making so far. It is very promising," Bond said.

The post office, built in 1933, has been semivacant for three years, since 1,600 postal workers were shifted to a new mail processing center east of downtown.

The proposal calls for the renovation of the five-story building and construction of three 200,000-square-foot office annexes on its west side. The plan also includes 5,500 parking spaces on the surface and underground.