Last July, the BBC confirmed plans to vacate the famous doughnut-shaped base in West London by 2015, as it seeks to cut costs and maximise the value of the site for licence fee payers. The plans, first hinted as long ago as 2007, could generate around £300m for the corporation.
Staff working at the base, which has been home to the BBC since the 1960s, will move to the revamped Broadcasting House in Central London, or the new BBC North headquarters in Salford.
But Newsnight host Paxman, who presented a five-part series on the British Empire for BBC One last autumn, questioned the logic of the move.
He told the Radio Times: "They always said that the way you know if the British are going to decolonise is when they start building massive government buildings - that was certainly the case in India.
"And the BBC's much the same. What organisation - at a time when it has no money, allegedly - would move from cheap square footage in West London to Oxford Circus?"
Paxman feels that the BBC is one of the lasting legacies of the British Empire, along with religion, sport and the global reach of the English language.
However, he added that the BBC is "far too politically correct" to have any echoes of the empire.
The 61-year-old argued that the UK Foreign Office should be scrapped and instead other routes used to spread British influence around the world, including BBC World Service.
"There's a very strong case for getting rid of the whole of the Foreign Office, apart from trade missions and consular services," he said.
"It grew as the empire grew, and it predates not merely email and video-conferencing, but the Bakelite telephone.
"We could spend the money on expanding the British Council, funding scholarships in Britain and developing the World Service of the BBC. That's the way you spread influence in the modern world."