Mayor Dave Cull and Dunedin North MP David Clark officially opened the cable car house in Mornington Park, which was finished earlier this year.
Bagpipers set the tone as two restored cable cars - Roslyn number 95 and Mornington trailer 111 - were rolled out of the shed for the crowd to look through.
It also marked the beginning of fundraising for the next stage of the project, expected to cost $6 million to 8 million.
For this the Dunedin Heritage Light Rail Trust will expand the shed into a two-storey complex able to hold at least six cable cars, a cafe, a museum and sports changing rooms.
The fourth and final stage would be the installing the finishing touches, such as tram stops along the route.
- additional reporting by Shawn McAvinue