The archaeological exploration of the bush-covered slope between the Littlebourne rugby ground and OBHS tennis courts above is being led by Dunedin military researcher Peter Trevathan.
He hoped to find evidence of the presence of soldiers from the Royal East Surrey Regiment 70th Foot, who transferred from British-controlled India to Dunedin in 1861, he said.
The regiment - comprising 95 soldiers and four officers - was sent south to provide security in the small settlement as Otago's gold rush gathered speed, and remained in the city until 1863.
They proved "very popular" while here, helping build roads and culverts, putting out fires, playing cricket and attending balls, and residents lined the streets to farewell them when they boarded their ship back to the United Kingdom.
At least, most of them did - 35 of the soldiers deserted to seek their fortunes in gold fields instead, he said.
Mr Trevathan said the regiment's link to Dunedin was not well known despite the unveiling of a plaque at Arthur Street School in 2017.
"It's the only British regiment to ever come this far south ... very few people knew there was a British regiment in Dunedin."
The regiment's presence at the barracks above OBHS was documented in photographs from the period, but few traces of their time there had been recovered, he said.
Excavations beginning yesterday - and continuing over the weekend - would have the students digging small exploratory holes and using a metal detector to search the area, he said.
By late morning, a 1960s ink bottle - with ink still inside - and a broken piece of pre-1900s stoneware had been recovered.
The hope was to find other examples of the regiment's presence, such as military buttons or buckles which may have "popped off" the soldiers' uniforms as they cleared bush in the area, he said.
"If we find something, it's of national significance," he said.
"It proves they were here and it's a treasure. It's a very important part of Otago and New Zealand history.