Blackwood said she was particularly pleased the designers had listened to the school's call to incorporate the existing trees and native plants into their design.
The build would be completed in two stages so the school could continue to run during construction, she said.
"They'll demolish half, which will create the space to build the whole new school, and then they'll demolish the remaining working buildings and re-landscape and tidy up."
Portable, temporary classrooms had been brought in to create teaching spaces away from the construction site.
Blackwood said the Dunedin school was the oldest in Otago and had a unique history.
It started on board the Philip Laing in 1847, where the children of Scottish immigrants were taught by school teacher James Blackie on the voyage to Dunedin.
On arrival in 1848, the school was transferred to a waterfront site near the foot of Dowling St, where it was known as Beach School.
In 1864, the school shifted to the corner of Tennyson St and York Pl, and was renamed Middle School.
And in 1877, it was shifted to its present site and called Arthur Street School.
The school had a major redevelopment in 1960, but some original buildings remain, including the school hall and the infant building.
Blackwood said the infant primary building was built in 1877 and is the oldest structure on the site.
It was categorised as a historic building in Dunedin, and Heritage New Zealand and the Ministry of Education were now working together to decide the future of the building.