The package would allow for filters, colours, patterns and projections to be displayed on the roof, pitch and seating areas, Dunedin Venues Management Ltd (DVML) said.
The project will feature new LED floodlights to provide for sports fixtures and high-definition night-time television broadcasting, as well as "crowd-experience" lights.
"It’s a thrill to be investing back into our stadium with an upgrade that will provide a world-class lighting experience to our events," DVML chief executive Terry Davies said.
A six-week construction programme started yesterday.
Tender documents said the lighting control system would provide the ability to switch each floodlight on and off rapidly, and vary their intensity, enabling the creation of light shows.
The lighting will be ready for major events at the stadium from February next year.
The project is being managed by Aotea Electric Southern, in partnership with Signify for the design of the lights.
It will involve removing 233 sports lights and replacing them with 262 new lights.
The additional crowd-experience lights will be installed above the stands and in the corners of the stadium.
Aotea Electric installed the original lighting in 2011.
More than 1000 hours had gone into planning execution of the lighting installation, Aotea Electric general manager Warren Taylor said.
Last year, DVML set out expectations for what an upgraded lighting system should provide.
Tender documents highlighted the potential for broadcasters to use light shows in their television productions, but the primary objective would be to entertain stadium spectators.
