The new wetland is being constructed by Burgiss Contracting who are building a "bund" or shallow stopbank to encircle a low-lying area of land which will be permanently flooded.
Additional material will be used to create three islands for wildlife habitat and secure bird nesting.
Earthworks kicked off in mid-January, with a karakia led by Ngati Kahungunu representatives.
Regional Council contract manager Antony Rewcastle said the contractors are doing a great job.
"They have strong experience in the mining industry and are enjoying this opportunity to create something with environmental benefits that will be a great asset to Hawke's Bay.
"There has been amazing support and enthusiasm from sponsors and project partners. Planting around the edges of the new wetland will be a key element and we'll be holding community planting days in June/July where people can get involved."
The 15ha wetland is located next to the 6ha Horseshoe Wetland, which was created by regional council in 2009.
The project is being funded in partnership by Te Wai Mauri Trust (which has obtained Te Wai Māori funding), Ngāti Kahungunu Iwi Inc, Napier Port and Hawke's Bay Regional Council.