The result, released this week in the 2010 annual report, had been achieved despite "an ongoing political and economic context which was not helpful", chief executive Phil Ker and council chairwoman Kathy Grant said in a statement within the report.
Like other polytechnics, Otago has had to cope with a gradual decline in core government funding over the past few years.
Those decisions included cost cutting throughout the organisation, a review of all programmes, about 20 redundancies in 2008 and a further 23 last year.
The polytechnic's financial fortunes have fluctuated markedly in the past decade, ranging from surpluses around the $1 million mark to a deficit of $1.2 million in 2003.
Last year's surplus was "a significant milestone in our strategy for financial sustainability", and indicated the polytechnic was now on a sounder financial footing, Mr Ker and Ms Grant said. Debt had virtually been eliminated and cash flow was strong.
"We are confident that the operating model now in use will ensure a sound financial performance on an ongoing basis, which is of particular importance in the present environment of constrained and capped government funding."
The report listed nine aspirations which would lead to financial sustainability. They included a reduced dependence on government funding, a culture of innovation and continuous improvement, long-term planning for strategic assets such as IT, land, buildings, plant and equipment, and managing the purchasing supply chain more closely.
The polytechnic had 8650 full- and part-time students - 3681 equivalent full-time students - enrolled in more than 100 programmes. Of more than 700 staff employed, 73% were women.
The polytechnic attracted $1.11 million in funding for staff research projects last year, three times higher than the $265,935 received the previous year.
Financial results
2010: $2.26 million
2009: $749,000
2008: $337,000 deficit
2007: $59,000
2006: $220,000 deficit
2005: $294,000
2004: $1 million
2003: $1.2 million deficit
2002: $101,000
2001: $1.16 million
