A programme of work in the area includes an upgraded playground, basketball half court, artwork, barbecue and picnic area and improved beach access.
On Saturday, about 40 volunteers pitched in for a planting programme, Te Rauone Beach Coast Care Committee chairman Graeme Burns said.
Hundreds of plants were added.
"It was great to see families involved," Mr Burns said.
"The community spirit is wonderful."
Mr Burns said committee members were pleased with progress on the beach and reserve development.
The broader project has been a combined effort led by the Dunedin City Council, Port Otago and mana whenua.
Port Otago has completed construction of three breakwater groynes at the beach, to assist sand build-up.
Sand is to be collected from Otago Harbour during routine dredging and placed on to the beach this winter.
Mr Burns said the city council had been proactive in upgrading the reserve.
"Planning for the playground is well advanced and the car park is almost complete."
The council has said the reserve project could cost about $900,000.
Access to the reserve may sometimes be limited during the work, which is expected to conclude this year.
A sculptural entrance designed by Aroha Novak, featuring a kowhaiwhai pattern developed by Otakou artist Kirsten Parkinson, will welcome people to the reserve.
Te Runanga o Otakou head Edward Ellison said the reserve was associated with the largest and oldest settlement south of the Waitaki River.
It held considerable significance to the Otakou runanga and hapu, he said.
The reserve is a popular site for recreation and viewing ships.
Southern grass skinks have also been captured there and housed inside a fenced area.
They will stay there during construction.
The council said the fence would be removed once the reserve work was finished and newly installed rock gardens and amenity plantings throughout the reserve would provide a skink-friendly habitat.
