South Dunedin's Neville St substation and its banks of historic equipment will be decommissioned by the end of the year after serving the area since 1951.
The substation will be replaced by the new Carisbrook substation across the street.
The replacement project involves the installation of 2km of new high-voltage underground cabling to replace existing gas-insulated cables.
Its smaller, more modern but more modest building, and the cabling required, will cost $13million.
An Aurora spokeswoman said substations took electricity from the national grid and lowered the voltage for local use.
Designed by architects McDowell Smith of Bond St, Dunedin, Neville St was opened on March 5, 1951, and was one of the oldest substations on Aurora's network.
It took electricity from the South Dunedin grid exit point by Portsmouth Dr and supplied it to 3600 homes and businesses.
Aurora asset reliability engineer David Paterson said before its demise, Carisbrook took its electricity from the substation.
Hillside Workshops still did, but not to the levels required in the past.
By Christmas the substation would be decommissioned, but no decision had been made on what would be done with the equipment or the building.
He said the station at one time had a room devoted to supplying electricity to the area's trolley buses.
Its history was also affected by its proximity to the next door Carisbrook Stadium, which closed in 2011.
Mr Paterson said a high window at the back of the building allowed employees a view of the field before the terraces were extended.
''I've heard many a story of people watching test matches from that window.''
The proximity to Carisbrook also caused a near disaster.
''One of the Super 12 games, for some reason the rugby union gave the people on the terraces toilet paper to use as streamers.''
Unfortunately, the wind that was blowing at the time pulled most of that paper into the 35kV electrical equipment outside the substation.
''Had there been any moisture in the air at the time it would have caused quite a fireworks show.
''Luckily, it wasn't raining , so we managed to get rid of it by taking the equipment out and removing it, but it was a bit of a dicey incident.''
Aurora said the new substation would cater for increasing levels of electricity demand, enhance network reliability, minimise failure risks and improve modern functionality and safety.
