Witness say the collapse hurled the two construction workers over the edge.
One was pronounced dead at the scene after he was buried under chunks of falling concrete.
"I think he went first and the concrete come on top of him, because where he lay was just a pile of blood," construction worker Walter Brown said. "It was like blood coming through the concrete, so you know he's buried."
Officials say the second construction worker was injured, but his fall was broken by safety netting. He was taken to an area hospital. The extent of the injuries were not immediately known.
It appears that wood forums on which the workers were walking on the 42nd floor collapsed under their feet.
"It just sounded like a truck fell from the roof and hit the ground," one witness said.
Varick Street was closed between Van Dam and Broome streets, one of the approaches into the Holland Tunnel. Sixth Avenue was also closed between Spring and Broome streets for staging. The closures caused massive traffic delays well into the evening commute.
Inspectors from the Buildings Department, along with numerous other city agencies, responded to the scene.
The high rise has been a persistent source of controversy in the neighborhood, west of SoHo. It was targeted by protestors, who claim the condominium hotel flagrantly violates zoning by selling homes in a commercial building.
To allow the construction in a commercial district, owners will be allowed to live in those apartments for only 120 days in the year, or 29 days out of any consecutive 36 days. When not living there, owners can rent out their apartments.
The building is slated to include 400 apartments priced at more than $3,000 per square foot. Those apartments will from 425 square-foot studios to suites of more than 10,000 square feet.
