Percussive reamer and method of use thereof

A percussive drill bit or reamer having a plurality of bit segments formed into a circular pattern suitable for drilling or reaming a hole. The bit segments are close-fitted and shaped to increase the cutting area and improve efficiency. Pressurized air exhausted from driving the percussion mechanism, or provided from a separate source, is passed into the bit segment and exits from a side face thereof into the gap formed between adjacent bit segments, thereby driving out any debris present in the gap and preventing binding of the bit segments. When utilized with mechanically-driven percussive bit assemblies, where air is only needed to remove debris from a rock face, separately-provided air is delivered to the bit segments of the present invention as described above to clear the gaps of debris.