Construction begins today on the MTA's Atlantic Yards, over which the arena is to be built, said a source familiar with development plans.

"It is the first work that's being done on the yards and ... the first step toward the project," he said.

A. Russo Wrecking is to begin demolishing a bus depot to create a temporary railyard on the eastern edge of the project, developer Forest City Ratner is expected to announce today.

The wrecking company won one of the largest of the more than $600,000 in initial construction contracts awarded to female- and minority-owned businesses.

"We signed a community-benefits agreement, and this is obviously part of that, and something we're very proud of," the source said.

Demolition of a former auto-repair shop at 179 Flatbush Ave., now owned by the developer Bruce Ratner, is also expected to begin this week, he said.

Opponents called the work "premature."

"Currently they don't own the land they need to build this [project], and they may never depending on a federal court's decision," said Daniel Goldstein, a Develop Don't Destroy Brooklyn spokesman, referring to a federal eminent-domain lawsuit.

Construction of the arena itself is scheduled to begin this fall.