Organiser Erin Thomson said the event was inspired by her childhood primary school in the United States of America.
Mrs Thomson said the Parent-Teacher Association would build a grotto in the library and transform it into a Christmas store.
"We would buy gifts for our family members for Christmas that cost under $1.
"The gifts would be things like pens, pencils, stickers, bookmarks, etc.
"It was absolutely magical."
Mrs Thomson said the Christmas Store had grown into quite an operation over the past four years.
"We have groups of crafting nanas who have made us almost 100 candy jars with decorated lids and who have decorated over 100 paper bags for gift wrapping.
"The Red Cross group in Timaru have made us hand-made gifts every year.
"They make the most adorable crocheted doll clothes, Barbie clothes, and even clothing sets for teddy bears and stuffed animals."
Mrs Thomson said other community members had donated new and gently-used gifts for the school to sell.
"Because all of our gifts have been donated, all the proceeds of the event go towards supporting our Kids Club and Activity Days that we host on school holidays."
She said the benefits of the event were numerous.
"We have high school helpers who gain community service hours by acting as ‘shopping elves’ so that kids can buy their gifts without parents knowing what they bought.
"Our adult ‘wrapping elves’ really get a kick out of chatting with the kids as they wrap their gifts."
Mrs Thomson said they kept the gift prices under $3 so that families of all sizes could afford for their children to shop.
"The money goes towards a great cause.
"I feel so happy knowing that the Children's Christmas Store is now an anticipated part of the holidays for the children of Fairlie, creating core memories like the ones I had as a child."
The event will be held on Sunday at St Columba Hall from 1pm-4pm.
