King & Wood Mallesons (KWM) has agreed to renew the lease on its 12,000sqm office space in one of Sydney's most prestigious buildings, Governor Phillip Tower, in the city's central business district.

The firm, which has been a resident of the tower for more than 20 years, is understood to have mulled options for 20 Martin Place, Grosvenor Place and Barangaroo South, but ultimately decided to stay put in its existing location.

As part of the agreement, KWM will renew its lease to occupy exactly 11,982sqm of space from level 54 to level 61 of the building, starting at the end of 2016 when the existing contract is due to expire.

However, the firm will not re-rent approximately 3,500sqm of back office space which it subleased last year when a string of Australian outfits scaled back in the city.

They included DLA Piper, Allens and Clayton Utz, with several firms also cutting back on lawyer numbers as a slump in work volumes put pressure on costs.

Coinciding with KWM's move will be Minter Ellison's relocation into the 1 Farrer Place development, agreed last December.

The independent big six firm, which signed a 12-year lease, will move from level 19, Aurora Place, on Phillip Street into neighbouring Governor Macquarie Tower, also set for 2016 and giving it 9,500sqm of space covering eight floors from level 41 downwards.

Another firm based in the property is Piper Alderman, while Corrs Chambers Westgarth moved out of Governor Philip Tower earlier this year into 8 Chifley Square with a view to growing headcount. 

According to a report by AFR, the asking rent at the building should have been more than $1200 per sqm for the high floors at the time of KWM's renewal but the firm will instead pay approximately $1000.

Related: Aussie leaders scale back in Sydney as tough market pushes firms to rethink strategies