The building - empty since 2000 - will become a facility that will offer 43 places to children aged between three months and five years.
The works started at the beginning of this year and will take around 30 weeks.
Director James Evans said: "I don't know anyone else that has done this at a garden centre. We've had the Manor House in the middle of the site redundant since my grandmother died in 2000. From our own experience looking for nurseries we decided to convert it into a day nursery. It dovetails well with the business."
He added: "The Manor House is a striking and integral part of Ruxley Manor Garden Centre and we are delighted that it will be reborn as an impressive and important new addition to our business.
"Choosing a day nursery is an important decision for any parent and whilst looking for childcare ourselves my wife and I realised there were hardly any nurseries that offered the sort of facilities we wanted. Grace's Day Nursery will provide a high quality service, have extended opening hours, easy access and modern facilities within a striking and lovingly-restored historical building."
Grace's Day Nursery will open this autumn is named in honour of Grace Evans - the grandmother of current directors Andrew and James Evans and a member of the five generation family that has run Ruxley Manor.
GCA chief executive Gillie Westwood said she believed having a children's nursery in a garden centre was "a first".