Police were called by a member of the public before 1pm yesterday after they spotted a group of young people spray-painting a wall in Serpentine Ave, near Maori Rd.
''The people that were doing the spray-painting ... believed they were able to use that wall,'' a police spokeswoman said.
The attending officer informed them it was privately owned and they would need to seek the permission of the owners before continuing with painting their mural.
''Police aren't against this type of thing,'' the spokeswoman said.
''The murals around town are part of what makes Dunedin unique.
''We just advised them to make sure they had the correct permissions in future.''
The group's members, who did not wish to be identified, referred to themselves at the Dunedin Street Art Crew.
They said they were painting a mural on the wall to beautify the area and cover up the graffiti which previously covered it.
The wall was owned by the Dunedin Amenities Society and one of the group's members was reaching out to the society, they said.
''We are basically cleaning it [the wall] up and going from there,'' one member said.
''The police must've thought that we were doing tagging, because we were spraying out an outline so we could see what we were doing.
''They must've thought we were up to no good but we just told them what we were up to. They moved along and said get permission.''
The group hoped to complete its artwork by last night.