The 9m Moana was given to the 16-member volunteer-run Oamaru Community Workshop last year for use on the children's playground, and workshop co-ordinator John Walker said restoration work to turn the fishing vessel into a sailing ship, complete with a 25ft mast, was taking shape nicely.
"We began work on this last year, and so far we have put in 1600 man-hours to get to this stage."
Mr Walker said restoration of the hull was almost complete, and the next stage of the project would a cabin arrangement on the rear of the ship.
The finished ship, which would also feature a slide and climbing ropes, should be ready by Christmas and would sit in a hole in the ground on the recreation area, he said.
"One of the local Lions clubs is building a jetty, so when the kids are up in the boat they can look straight over on to the ocean."