Filtered searches in the new system would block terms such as "Tibet" and "Tiananmen Square". According to some rights groups, the new search engine would capture the data of people making Google searches, including their names, address and phone numbers.
Project Dragonfly was first revealed in a report last August, which prompted outrage from both human rights groups and Google employees.
An open letter signed by more than 300 Google employees called for the company to cancel the project, which they feared could be used to monitor dissident and further violate rights of Chinese citizens.
Last week Newsroom.co.nz reported that its website had been blocked in China, along with The Guardian, Washington Post, NBC, Huffpost, the Toronto Star and The Intercept website.
Wikipedia was also banned for several weeks prior to the 30th anniversary of the Tiananmen Square massacre on June 4.
Google chief executive Sundar Pichai told US regulators last December it had no plans to launch the censored search engines "right now", but its employees remain unconvinced.
"While reports suggest that Dragonfly has been put on hold, Google's leadership have defended its development and their right to launch it again in the future," Kesang said.
"This is despite the risk it poses to Google's vision of free and open internet, and the human rights of Chinese, Tibetans and Uighurs."
Kesang claimed at least a million Uighurs were being detained in mass internment camps by Chinese authorities "simply because they are Muslim" and Tibet, which is occupied by China, remained the second-least-free territory in the world behind Syria.
"We want to let the public know what Google is doing for China just in order to get into the Chinese market," he added.
Google is currently blocked in China, and according to media reports, Dragonfly was meant to give the search giant a way back into the lucrative China market.
When contacted, a Google spokesman denied there was any work now being undertaken on Project Dragonfly and that team members had moved to new projects.
"Google has been open about its desire to increase its ability to serve users in China and other countries," he said.
"We have considered a variety of options for how to offer services in China in a way that is consistent with our mission and have gradually expanded our offerings to consumers in China, including Google Translate."
The spokesman said there were currently "no plans to launch Search in China".
The hour-long protest will start at noon outside the PWC Tower on Quay St.
