Though he could not be drawn on what the book might be about - he prefers not to talk about a novel too much before it is finished - he said it would ''take on a Central Otago flavour''.
At least part of it will be set in Central Otago, which is one of the reasons he accepted the artist in residence position.
Henderson Arts Trust trustee Grahame Sydney said Marshall was ''probably the most respected and revered short story writer in New Zealand'' which was one of the reasons why the trust had offered him the residency.
Residency was offered ''as a reward for a long and wonderful career, for those who have stuck it out ... and contributed to New Zealand culture.''
''We're trying to balance the huge number of grants and opportunities available for those who are starting out. There's far too little for those who have sustained a career at a very high level.''
Marshall (72) was born in Te Kuiti to a ''bookish family'' and grew up in Timaru.
He studied at the University of Canterbury, gaining his MA (Hons) in 1964 and a diploma in teaching a year later.
He taught English and history, mostly at Waitaki Boys' High School, for 25 years before deciding to focus on writing full time, though he continued to teach a creative writing course at the University of Canterbury.
In 1977, his first short story was published and two years later, his first book of short stories, was published. His first published novel came almost 20 years later, after the 1992 Otago University Burns Fellowship.
He said he was initially interested in writing short stories for several reasons, including the challenge of the ''economical nature of the presentation ... every word has to contribute''.
However, he said editors tend to ''nudge'' short story writers towards novels, because they were easier to market.
''It's interesting why that should be. This is an age of ... busy people, you would think this would be the golden age of short stories.''
Marshall has written or edited 25 books, including four novels and two books of poetry. He has held fellowships at the universities of Canterbury and Otago and in Menton, France, received the ONZM and the CNZM for Service to Literature, won a Montana New Zealand book award and received an honorary doctorate from the University of Canterbury.
He and wife Jackie, who normally reside in Timaru, moved to Alexandra about a month ago, after accepting the residency late last year.
He said the house was significant for several reasons, which made him feel even more privileged to be there.
It was designed by the Austrian-New Zealand modernist architect Ernst Plischke and built in 1950 for Russell and Barbara Henderson. Mrs Henderson was a patron of the arts and Mr Henderson an entrepreneur.
Since it was taken over by the trust, it has been a temporary home to highly creative types.
As well as working on his new novel, and writing some poetry, Marshall plans to offer workshops to schools and possibly adults, depending on the interest.
He will also speak at the Otago Daily Times theatre on April 16.
He expects to live at Henderson House at least until summer. Recipients of the scheme can choose how long they stay.sarah.marquet@odt.co.nz