The viewing shed, designed by former city architect Robert Tongue and Baker Garden Architects, will house the historic 100-tonne locomotive Ja1274, based at the museum.
The glass-sided shed, about 6m high, is expected to be built by the middle of next year and the locomotive will then be moved to its new home, about 50m south of the railway station, museum officials said.
Another historic locomotive, Josephine, will also feature in the museum's new prow-shaped northern entry, which is part of the museum's $8.6 million fourth-stage redevelopment.
This figure also included extensive exhibition development, as well as the northern entry and lobby, officials said.
Now generally closed except for special events, the museum, owned by the Dunedin City Council, is expected to reopen late next year after its overall $35 million redevelopment is completed.
Museum visitors will also be able to use a southern entry, beside the nearby Chinese Garden.
Museum officials this week released the design of the locomotive viewing shed and the north entry. The new entry area makes extensive use of glass, and includes some Oamaru stone within the foyer.
The redevelopment's third stage, involving the museum's original brick Burnside building, is still under way.
Council community life general manager Graeme Hall said the new viewing shed and redevelopment would further strengthen Dunedin's central city visitor attractions and help encourage out-of-town visitors to stay longer in the city.
The Dunedin Railway Station attracted about 400,000 visitors a year, he said, and the nearby viewing shed and Ja-class locomotive would help attract some of those people towards the museum.
Josephine, a double-Fairlie locomotive would also be clearly visible through glass at the northern end of the museum, also helping lure visitors, he said.
Museum director Linda Wigley said the new museum entry and lobby would be "modern, but in keeping with the surrounding heritage precinct".
The final phase of the redevelopment would mean "greater visibility" for the Ja-class engine.
Locomotive Ja1274 was the 35th and last of its class built at the city's Hillside Railway Workshops between 1946 and 1956. Josephine was one of the first steam locomotives operated in the Dunedin area, entering service in 1872.
