The $105 million project to redevelop the facility into a modern wagon building complex is expected to be completed by early 2024.
On the site is an 1870s workshop building and a mid-1920s manager’s office, which heritage activists want to see preserved.
Southern Heritage Trust chairwoman Jo Galer said consideration needed to be given to keeping the buildings, such as incorporating them into the new facility.
The trust was not against the redevelopment, but the ingenuity and craftsmanship which occurred inside the buildings was part of New Zealand’s industrial heritage and needed to be preserved, she said.
Both of the buildings were framed with native timbers with low carbon footprints, which made them "relatively straightforward" to upgrade to modern seismic standards.
Dunedin city councillor Sophie Barker said the existing buildings could be reused, which would help preserve the heritage.
"I would love the people of Dunedin to stand up for it and work with us to save these amazing buildings."
KiwiRail mechanical facilities programme director Daniel Headifen said the 1870s workshop was asbestos-contaminated and had a low earthquake rating, but it was actively investigating the feasibility of incorporating it into the new facility.
The office was not part of the original Hillside site, was not used as a workshop and KiwiRail had no use for it.
"If a heritage organisation or member of the public wanted the building, we are happy for them to take it away."
There were no plans to demolish the war memorial near the manager’s building and it would be incorporated into the new design, he said.
