But the money-making initiative has not been welcomed by the New Zealand Educational Institute.
In the 2010 Budget last May, the Government announced the early childhood education sector would save $280 million over four years through a reduced financial incentive for centres to have 100% qualified staff.
The previous government had encouraged ECE providers to have all staff qualified and they had received subsidies for them.
But from next month only 80% of a centre's staff will receive funding.
Dunedin Kindergarten Association (DKA) manager Christine Gale said the cut meant the association expected to lose about $1.2 million in annual funding from the Government for its 22 centres in Dunedin this year.
As a result, the association was having to come up with cost-saving and money-making initiatives, she said.
"We have had to start thinking outside the square a bit."
The association, which has been in existence for 122 years, has opened one of its centres near the University of Otago during the school holidays, to run a holiday programme in conjunction with the university's Summer School.
The Kelsey Yaralla Kindergarten reopened on January 10 and will remain open until normal classes at the remainder of the association's kindergartens resume officially on January 24.
The kindergarten teachers' union, the New Zealand Educational Institute was unhappy about the kindergarten opening during the official holiday period, because it meant the teachers would need to cut their holidays short and return to work two weeks earlier.
NZEI national executive member Fiona Matapo, of Dunedin, said the union was looking after the rights of kindergarten teachers as laid out in the collective employment agreement.
"NZEI's responsibility is to make sure collective employment agreements are upheld."
However, Ms Gale said the association had managed to avoid a dispute with the union by using teachers who were not permanently employed by DKA.
This meant the association was not violating union contracts by asking teachers to work during their official holiday.
Mrs Matapo said it was a "sensible compromise".
Ms Gale said 32 children from around the city had been attending the holiday programme, which was generating a small increase in revenue for DKA.
Despite the income, the overall benefit was that the association was providing a place for parents to send their children so they did not have to find alternative care during the holiday period.
"We realised our families don't have the luxury of a five-week break ..."
It was also designed to attract and retain a market share of pupils for DKA centres in Dunedin, she said.
Ms Gale said the holiday programme would be reviewed and if it programme was seen to have value in the community, more would be held in the future.
