Heritage Destinations general manager Nick Chin said retaining and repairing the existing mechanism was looked into, but the automated option was chosen.
"The existing mechanism was extensively damaged during the 2011 quakes and was in an extremely fragile state when retrieved. Even if restored there was no guarantee how long all the parts would last, so maintenance costs and longevity were issues. Also, with the public unable to access inside the new tower to view the existing mechanism if rebuilt, it was felt an automated mechanism was a better option."
He said putting the original mechanism on display at a local museum was an option.
The timeball, tower with original brickwork, and the flagpole will be rebuilt. The original residence will not.
The grounds will also be landscaped similar to what they were like, to commemorate the significant maritime feature that had been an integral part of Lyttelton's history.
The station was severely damaged in the September 4, 2010, February 22, and June 13, 2011, earthquakes.
Originally, work to restore it was due to start in July last year.
The project was put on hold to avoid conflict with road works on Sumner Rd and Reserve Tce to prevent disruption.