Volunteers from the Oamaru Steam and Rail Society have been refitting the society's 1924 Hudswell Clarke B10 locomotive for the past three months, following a five-year wait for repairs to the engine's four-tonne boiler.
Society manager Harry Andrew said restoration work was well-advanced.
Mr Andrew said if all went to plan, the locomotive could be back on the society's scenic track between Itchen St and the Blue Penguin Colony early in the New Year, the first time since 2007.
"B10 is slowly being worked on. It won't be going for Christmas, it's going to take a while to replumb it. It's just a major, major job.
"It's got a new water tank on it, everything is replaced that needed to be and it should last the club many years if it's looked after."
Mr Andrew said the biggest challenge was getting together a team big enough to help with plumbing the pipework.
"It hasn't got its funnel on yet, but it has its water tank on, its steam pump on. The cab's on it, and it looks like a loco now."
Society volunteer Frank Thomas said the boiler fire should be ready to light in about two months, ahead of full safety-compliance tests.
