The city government has given permission to District 5 authorities to knock down the apartment complex on 440 Tran Hung Dao Street.
The families will live temporarily in the An Phu building in District 6 pending compensation and relocation.
The three-story apartment complex was built before 1975 and is severely degraded.
But many of the families have refused to move and instead want the government to pay them compensation so that they can find a place to live themselves.