The Dunedin City Council-owned museum has instead installed two window displays, promoting the message: "No peeking. We're changing" and announcing the museum will reopen late next year.
At a recent settlers museum board meeting, council community life general manager Graeme Hall said the initial idea of attaching a banner to the wall had struck complications that concerned requirements of insurance cover for the museum's new paintwork.
There had been further concerns a large banner could prove distracting for motorists using the state highway outside the museum.
Initial plans had proved too difficult and a different approach would be taken, Mr Hall said.
Museum director Linda Wigley said this week that as the next tourist season drew nearer, museum officials were keen to promote the message that although the museum's main galleries were closed to the public, a redeveloped facility would be open late next year.
Other museum activities, including its education programme, were still continuing.
The museum now planned to display a large banner on the east side of the museum's new storage building and another, at the north end of the museum complex, by about the middle of October, she said.
The north-facing banner was intended to alert visitors to the Dunedin Railway Station that the nearby museum complex was closed, rather than having people walking along to the museum and finding it closed for the redevelopment.
