Work to transform a dreary transit center into a dazzling anchor for a new downtown was halted because of a delay in federal stimulus allocations, and when work will resume is unknown.

The aging Transbay Transit Terminal at First and Mission streets is slated to be torn down and replaced.

San Francisco’s tallest skyscraper will flank the new transit hub — and surrounding former freeway lots will fill with new buildings — under closely related redevelopment.

The plans are designed to extend downtown south of Market Street.

A temporary terminal built next to the site was supposed to be bustling with bus traffic by now, and an army of workers should be dismantling the existing center. Instead, the temporary terminal is fenced off and workers who could have helped with demolition efforts are scrounging for recession-era jobs.

The work stoppage dates back to a July decision by directors of the Transbay Joint Powers Authority, a multigovernment group created to oversee the project.

In July, directors agreed to redesign the project in hopes that the Federal Railroad Administration would provide $400 million in stimulus funds needed to incorporate an underground train station.

The railroad administration initially planned to announce its ruling on the stimulus application by October, and joint-powers directors said they would switch the project back to its original design if the application was rejected.

On Oct. 6, however, the railroad administration said it would instead make the announcement in winter.

“With an announcement in October, we would have seen no delay,” joint-powers Director Chris Daly, who’s a city supervisor, said Tuesday. “We were shovel-ready.”

On Tuesday, more than 11 months after the American Recovery and Reinvestment Act was signed by President Barack Obama, the railroad administration said it still did not know when it would rule on stimulus funding applications.

“It will be before the spring,” spokesman Warren Flatau said. “It’s a very time-consuming effort.”

jupton@sfexaminer.com