Led by The Catlins Area School at Owaka, a Clutha consortium of secondary schools and polytechnics, with support from training providers, has been shortlisted by the Ministry of Education to become one of five new national trade academies.
Twelve projects from around the country are in the running for the five spots.
Catlins deputy principal Allan Jon, who has been extensively involved in the project, said the virtual school would be the first of its type delivering vocational training to young New Zealanders through online learning.
Campus students would have access to an e-library, a virtual career guidance counsellor and e-tutors with e-learning courses that include video conferencing, Skype contact, podcasts, 3D visualisation tools and even the use of mobile phones as learning tools.
"The New Zealand Virtual School will be the first of its kind to deliver education in such an engaging way," Mr Jon said.
The idea has the backing of South Otago High School, Blue Mountain College, Tokomairiro High School and Telford Rural Polytechnic while training groups have also backed the application.
Projects of all kinds have been forwarded to the ministry but Mr Jon said the Catlins-led virtual school concept should go ahead to serve the best interests of the national education market.
"Given the large rural population of New Zealand, the distances between regional centres and the strong need for trade training opportunities within geographically remote communities, the development of the New Zealand Virtual School will mean that location need no longer be a barrier to learning."
The programme, if chosen, would build on The Catlins Schools' e-learning successes which revolve around aviation studies and have already attracted students from around the South Island.
Other trades could also be taught at the academy which would be based in the online world, although a physical office would be set up at the Tokomairiro Training centre in Milton.
Mr Jon estimates up to another dozen industries could be included in the future.
The proposal includes staging "e-camps" for each trade once a year where students could complete "hands-on" tasks with their instructors, as well as get more detailed career guidance at the same time.
Clutha District Council district development board chairman Jeff Seymour said The Catlins School and Clutha district would gain a national and international profile.
Mr Jon hopes to hear if the South Otago bid is successful early in the third school term.
