In the late 1870s, proposals for a railway line to or through Waikaia were seriously considered as part of a link between Gore and Lumsden.
In 1884, construction commenced northwards from Riversdale.
At some point over the next 20 years, the track was removed to be used elsewhere, but work recommenced by 1904.
A combined road-rail bridge over the Mataura River, the only work of significance required for the line, opened in May 1904.
There were local fears that only the initial portion of the line would be built, but in 1905, the undersecretary for Public Works and the district engineer inspected the proposed route and felt that due to the agricultural land in the area, it would be a mistake to terminate the line short of Waikaia township.
By 1908, the 3.2km of track constructed in the 1880s had been re-laid and remaining construction was swift.
