Work to demolish the former Elephant & Castle Leisure Centre has been delayed after human remains were found on the site.
The centre closed to the public in June and was due to be demolished this autumn to make way for a new high-rise tower of luxury housing and a replacement leisure centre and swimming pool.
The centre adjoins St Mary's Churchyard and the former site of the church of St Mary Newington and it was expected that some human remains would be found but the extent of the burials has come as a surprise to the council.
None of the remains have been identified or can be identified; they potentially date back to when the graveyard was first used in medieval times.
"The remains will be treated respectfully and we will be following the Ministry of Justice's guidance to peacefully re-bury or relocate them," said Cllr Peter John, leader of Southwark Council.
"The leisure centre work will resume as soon as we've sensitively dealt with this issue."
The remains have to be reburied, unless they pose any risk to health of the archaeologists or public, in which case they would be disposed of as hazardous waste.
Some remains are in coffins and will bereburied in a cemetery outside the borough.
Other bones will be retained for investigation and reburial, possibly in one of Southwark Council's own cemeteries.
The council says that the extra archaeological works will delay the start of construction of the new centre by approximately three months from November 2012 to February 2013.
Planning applications for the new leisure centre – and the adjacent housing development by Lend Lease – are currently being considered by Southwark planning officers and are due to be determined by councillors this autumn.