The demolition of the school's former senior block will make way for stage one of the facility's redevelopment - a double-storeyed building to house an office area, meeting room and two teaching spaces.
Principal Adele Gott said the pupils were excited by the latest activity and classes inspected the site every day to check on progress.
"They can't wait for the work to begin on the new block and it's really the start of a new era for the school, creating a new identity," she said.
Tenders to construct the new building had closed and there were five interested parties, board chairman Shane Crawford said.
The demolition will be completed within a week.
Construction is expected to begin in January and should be finished by the end of the first term, in April.
About $600,000 has been allocated to the project, with the Ministry of Education providing about $400,000 and the remainder coming from the board's property fund.
The block of three classrooms, built in 1939, was deemed unsafe due to its age and condition, Miss Gott said.
The school had applied to the ministry for funding to redevelop the rest of the school but was turned down, because two of the rooms in the main block had been upgraded seven or eight years ago.
"We're still planning for a new school and will continue to push our case and work with the ministry towards that goal,"she said.
The plan was to have the whole school next to the new block, all double-storeyed to leave as much green space as possible.
Architect Philip Gilchrist, of Dunedin, has drawn up the plans.
He was also responsible for the Alexandra Kindergarten building which opened on the primary school grounds earlier this year.
The design would give a "new face"to the school.
"A lot of thought has gone into it and what's needed. For example, we're right in the centre of town, near the public library and Pioneer Park, and the proposed Alexandra Community House," she said.
The school had decided against replicating facilities, so it would not be incorporating a library into its design, preferring to use the town library instead.
The school roll was a "very healthy" 212, she said.
