Regional manager Alan Hill said the $105 million redevelopment was well under way, and was on track to be completed by the middle of this year.
More than 90% of the demolition material on site had been recycled, he said.
This included more than 30 tonnes of native timber, 2965 tonnes of metal and 8280 tonnes of concrete.
"It started off after the earthquakes in Christchurch, where we really understood we needed some good resilience in the South Island.
"This has been a mission to get all of the various components of KiwiRail in Dunedin back in the one place again."
There had been the opportunity to reuse recycled rail from the Auckland metropolitan rebuild in the rail yard, and a push to improve the safety of workers by creating a dedicated path between the rail lines.
"It’s been a huge project to give rail that resilience."
The restoration work included bringing the machine room up to modern earthquake-resistant standards.
"We’ve done it in a way that’s inviting and modern while also respecting the heritage of the building, which was built in the 1870s."
The first wagons were likely to roll off the line in mid-March.
KiwiRail expected to assemble about 1500 wagons over three years, he said.
"UGL Rail [of Australia] has contracted the wagon work to KiwiRail, who will then buy the product back off them.
More than 500 people had been employed to work on the site since construction began about three years ago, and the site would host up to 170 staff once complete.
Of those staff, up to 10% at any given time would be apprentices.
"This is an exciting new era for KiwiRail."
