So far $670,000 has been spent on the concept stage of the proposed rebrand.
Yesterday’s announcement kicks off a $126,000 consultation exercise in which students, staff and alumni will be asked for their views.
Acting vice-chancellor Prof Helen Nicholson said the proposal was a "bold change" which represented the university’s aspirations for the future.
"We want to reflect modern Aotearoa New Zealand and continue to lead at the forefront of our nation’s progress. And we want our visual identity which speaks to our unique and special place in the world," she said.
Consultation follows the launch of the university’s new strategy Vision 2040 last month, aimed at creating a Treaty of Waitangi-led organisation.
The proposed tohu replacing the coat of arms is designed to be a representation of the Ōtākou channel, in Otago Harbour, where Māori and European settlers arrived in the region.The macron was a nod to a waka, while the dual streams below it symbolised partnership between teachers and students, and between the university and the rest of the world.
It was envisaged the coat of arms would be retained in ceremonial settings such as graduation events and in university colleges.
The proposal also includes changing the current Māori name from Te Whare Wānanga o Otāgo, to Ōtākou Whakaihu Waka — a metaphor meaning A Place of Many Firsts.
The name and tohu were created in consultation with mana whenua, the university said.
A te reo version of the logo, with the words "University of Otago" less prominent, would be used internally and "when appropriate".
University of Otago deputy vice-chancellor of external engagement Prof Tony Ballantyne said this would encourage students to embrace the Māori name. Externally, the English name would be displayed more prominently.
While the university logo has undergone some changes throughout the institution’s 154-year history, the shield design has remained similar.
The university was "not walking away" from this, and Prof Ballantyne emphasised the continued ceremonial use of the coat of arms.
Change was not a forgone conclusion, he said.
The university would conduct a survey of staff, students and alumni opinion and hold forums as part of the consultation, the largest in the history of the university.
"We want to hear from all members of our community on whether they think it is the right time to change, and whether we think these proposed changes align with the future direction of our university."
The consultation runs until April 16.
