The former kindergarten has been demolished and the site on the corner of English Ave and Maryhill Tce is cleared.
Dunedin Kindergartens general manager Christine Kerr said a new kindergarten designed by McCoy and Wixon Architects and built by Stewart Construction will soon begin to emerge on the site.
The same partnership won the education category at the 2022 Southern Architecture Awards for Richard Hudson Kindergarten, Mrs Kerr said.
A more useful section was being created by reducing a slope, and the new building would have modern features including plenty of light. It would also be accessible for children with disabilities.
There had been a kindergarten on the site since 1961, and it had been very well supported by the local community for many years, Mrs Kerr said.
"There is a lot of community interest, so wherever I go people stop to ask me [what is happening]."
While construction was taking place, all the children had been able to continue being cared for at an alternative site in Lockerbie St, Corstorphine.
The new kindergarten was expected to be completed mid-way through next year, Mrs Kerr said.
