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The Auckland City Council is hoping the $8.9 million upgrade of a reserve will act as an inner-city getaway for workers.
An official site blessing and sod turning ceremony yesterday marked the start of work on St Patrick's Square.
But some city leaders say the council has not spent enough on the upgrade.
Located besides St Patrick's Cathedral between Albert, Swanson and Wyndham Sts, the square is the largest area of open green space from the middle of town to the waterfront, according to the council.
The project, due to be completed in November next year, will include trees, water features, artworks, lighting, paving and seating areas.
Auckland City Mayor John Banks said the upgrade would transform the space into an "urban oasis".
"The square will become a place of respite from the hustle and bustle of the central city, where people can meet and socialise, reflect and contemplate.
"The square is particularly important to people living and working in this part of the CBD."
The development is part of Auckland's "CBD into the Future" strategy, an $810 million project that began in 2004 to transform the district.
Monsignor Bernard Kiely, administrator of St Patrick's Cathedral, said the design would complement the restoration of the church, completed in September last year, and "create a much needed sanctuary of peace in the heart of the city".
An additional $608,835 for the project was sought by the CBD Board, an advisory body representing groups with interests in the area, at a council meeting last month.
Only $158,000 was approved after it was decided lighting outside the cathedral would be removed from the current plans but ducting would be laid to allow for it in the future.
It was decided the board would also consider changing the planned triangular-patterned paving to a more standard pattern in order to cut costs.
The chief executive of the Heart of the City business group, Alex Swney, has said the council should have allowed the funding.
"When are we going to take on the maxim, 'Do it once, do it right'?"
He said the project was being funded by development contributions and the CBD targeted rate.
"This seems like a no brainer - we should be supporting this increase with the only caveat being that we are sure of additional quality outcomes."
The council developed the plans over the last two years, with input from nearby residents, businesses and square users.
To minimise disruption, the council's contractor will undertake work in phases, as well as ensuring pedestrian access throughout.
Businesses will remain open during construction.
