Frankton Playcentre will stay open onsite "until the end of the 2008 school year", the Ministry of Education says, after an agreement between the ministry, playcentre management and the Remarkables School Establishment Board of Trustees.
Playcentre president Andi Smillie said the ministry had been "open and positive" with the group.
She confirmed the centre would reopen in 2009 for the new term, either in its existing site, or another location, on February 10.
Ministry southern region manager Michael De'Ath said the present playcentre building would need to be demolished before site works for the construction of the new Remarkables Primary School.
However, he did not give a date for demolition.
"Construction of the new school is expected to start as soon as practicable following agreement of capital funding and subsequently the appointment of a contractor under a construction contract.
"The programming of the project is the responsibility of the contractor."
Mr De'Ath said the ministry was still working towards a February 2010 opening date for Remarkables Primary School "at this stage".
The capital funding sought includes the provision to build a new playcentre on the school site, he said.
"Community-based providers and private providers have expressed interest in providing places in this area.
The community-based providers have the option to seek funding via the Discretionary Grants Scheme and are exploring this avenue."
Mr De'Ath said ministry staff were working with the Otago Playcentre Association to ensure alternative accommodation was provided when required.
The playcentre is used by more than 30 families and has 52 children on its roll.
The establishment board of trustees has finished interviewing candidates for the job of principal of Remarkables Primary School.
Chairman Roy Thompson said the board was impressed by the number of high-quality applications and planned to make an appointment in about three weeks.
The new principal would start work in April.