The Victorian-style tableau, unveiled in 2011 as part of the Illuminations and designed by Laurence Llewelyn-Bowen, featured animated ballerinas, waterfalls and dramatic lighting effects. In recent years it had fallen out of use and was boarded up.
Blackpool Council has confirmed the structure and the building housing it are being taken down, with much of the installation set to be returned to the Illuminations depot for storage and possible reuse.
Plans have been submitted for an Upside Down House attraction on the same site near South Pier.
The two-storey structure would appear to sit on its roof and offer visitors unusual photo opportunities inside.
Take a look at the demolition in the gallery below:
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