While it has offices across the Yorkshire region, the Bradford base has served as its main headquarters since 1989.
According to its website, the company employs more than 5,000, of which 40% live and work in the region.
Yorkshire Water said approximately 700 people worked out of its head office with others in hybrid working roles.
The spokesperson added: “To bring our existing location up-to-date would have required significant investment and caused long-term disruption to our delivery and teams.
“We will be maintaining our offices at Thornbury, Bradford, where we employ more than 600 people, and other key satellite sites in the city.
They said: “We have now started a consultation period with our colleagues, including through unions, to ensure everyone is supported in this move over the next eight to 12 months.”
Unison Yorkshire Water branch secretary Natalie Mladenovic-Haigh said they had been made aware of the intention to close the site earlier.
She said: “We have now entered an elongated period of consultation with the employer and our priority, as always, will be our members.
“We will continue to support any members that are impacted by this move as we move through the coming months.
“The move is not scheduled to take place until the summer of 2026 so we will be working with our members to ensure the move is as smooth as possible.”