Buildings are the largest consumer of energy and a major source of greenhouse gas (GHG) emission. This incurs a large sum of money to society. It is evident that incorporating green features in buildings can substantially save energy and water consumption, and reduces GHG emissions; however, it is perceived to be costly both by public and private sectors. Often, the investment decisions are made considering the initial cost of the project. Therefore, the purpose of this research is to identify the costs and potential benefits of green buildings over the life cycle of the project using Cost Benefit Analysis (CBA), which performs an economic assessment in project appraisal that helps investors and policymakers in better decision making. The study involves a case study of a public office building from Nepal, which is located at Dumre- Bhansar New Town. The existing building is retrofitted with green components such as solar panels and rainwater harvesting for energy efficiency and water efficiency. The results show that investing in green buildings reduce the life cycle cost of the project, and therefore generates value for money in public investment in the long run. A policy recommendation on subsidy helps in scaling the project to private sectors especially residential buildings. The most important contribution of this study lies in identifying the costs and benefits of green building and introducing the concept of life cycle cost using CBA, which increases awareness and removes barriers in implementing green technologies. This paper also acts as an introductory guideline for project appraisal and formulating policies for the Government of Nepal.