Dunedin City Council city property manager Kevin Taylor said yesterday staff were identifying a site and looking at what sort of public toilet would be installed.
There were two options available for a site.
"If there's not a permanent solution there will be temporary arrangements in place.''
Mr Taylor said one or the other would be in place before cruise ship season began in October.
A lack of toilets at the popular tourist spot has caused issues in the Northeast Valley area for some time.
Last year, Otago Community Hospice chief executive Ginny Green said sightseers entered the facility looking for toilets.
Nick Van Der Jagt, co-owner of Grid Coffee, a cafe and roastery in North Rd, said yesterday's news was "fantastic''.
"Any toilets that go in anywhere here have got to be a positive for the city.''
Her business recently had to deal with up to 15 people waiting to use the customer-only toilet.
"Some people ask and that's fine, but we do certainly get a higher percentage of people who just come in and use the toilet and leave again.''
Dunedin bus tour operator BookaTour's Bex Hill has also raised the toilet issue, which she said caused difficulty for bus operators when they took tourists to the street.
There was limited parking at nearby public toilets in Opoho Rd and at the upper botanic garden.
Yesterday she described the news as "very exciting''.
Baldwin St was "a great little hub for business'' which needed some help with the problems that had arisen.
"That's great. I would be personally stoked if they could do that.''
Earlier this month, council chief executive Sue Bidrose said $200,000 had been set aside for toilets this financial year and $150,000 in following years.
Installing toilets in Baldwin St, at Waitati, and on the West Harbour shared pathway had been identified as three priorities.
The $150,000 allocated per year would pay for about one block of toilets.
