Ja 1274 was the last steam locomotive made in New Zealand, at Dunedin's Hillside railway workshops in 1956, and has been displayed at the museum since 1975.
Railway enthusiasts and curious spectators lined up yesterday to see the engine being moved towards its new home, 50m south of the Dunedin Railway Station, as part of the $8.6 million museum redevelopment.
Members of rail enthusiast group Ocean Beach Railway lubricated the engine's running gear this week to prepare it for the move.
"It's great to see it out. It gives people a taste of what it used to be like and the conditions people used to work in. There aren't many of these around that you can get close to and have a good look at," general manager Shane Murray said.
"Nothing brings out 'foamers' (railway enthusiasts) like a steam engine being moved."
One "foamer" present was former New Zealand Railways worker Alex Toon, who was getting reacquainted with an old friend.
"I fired up that engine in Christchurch in the 1960s and travelled on her over Arthurs Pass. She was one of the leading engines for the express," he said.
"It's beautiful to see her out in the sunlight. She's a lovely old engine. Steam is history. It would be nice to see her working again," Mr Toon said.
"All the running gear is in excellent condition. It just needs the firebox re-bricked and the boiler checked and she'd be ready to go."
The 100-tonne Ja 1274 was the 35th, and last, of its class built at Hillside for New Zealand Railways between 1946 and 1956.
The Ja class locomotives powered the South Island express train passenger service until they were superseded by Dj class diesels in 1971.
Ja 1274 will be wrapped in protective covers and security fenced until it is moved into the new 6m-high glass viewing shed next month.
