Kindergarten Association manager Angela Jacobsen said building consent had been applied for and, all going well, the successful tenderer, Mudgway Services of Clyde, would be able to begin construction within the next two months.
The building should be completed and ready for occupation by next April, in time for the beginning of the second school term, Ms Jacobsen said.
The kindergarten committee had originally planned a major refurbishment of the old building but, after receiving an application for funding, the Central Lakes Trust had suggested rebuilding at a new location would be a better option.
The trust had agreed in principle to be the project's major funder.
The balance of the funding would come from the sale of the building and from other sources, Ms Jacobsen said.
Alexandra Kindergarten head teacher Jan Johnson said the kindergarten office space was becoming crowded as they now had three teachers and often had a work experience person as well.
She said the children's toilets and changing facilities left a lot to be desired and the whole building was "very tired".
An agreement had been reached in principle with the Alexandra Primary School for use of land on the school grounds.
School Board of trustees chairman Shane Crawford said it was a great idea and the board was in full agreement with the move.
There was plenty of room for the new building to the north of the footpath at the end of Ventry St.
He said it would also be a much safer drop-off and pick-up point as the two points of access were from a dead-end street and a confined car park.
