The site of the new forestry service Te Uru Rākau building has been blessed to "enable the waka of construction to commence".
Whakarewarewa School welcomed Government dignitaries with Tūhourangi waiata, and led the visitors through others, as the ground was dedicated to its new purpose.
Forestry Minister Shane Jones announced the new building would be shared with the Department of Conservation.
He said it would "bring the faded glories of the forestry sector back to a place of pride" and show "we're serious and we're in business".
The building will ultimately house 50 Ministry for Primary Industries staff, with 25 of those from Te Uru Rākau.
"The current office, also located on Scion's Rotorua campus, has been assessed as no longer fit for purpose and an alternative solution was required to accommodate the growing number of regional staff," he said in a press release.
"The purpose-built facility will be constructed with sustainable construction techniques, including using New Zealand grown timber for both the structural and visible parts of the building.
"Using New Zealand-engineered timber will deliver a range of benefits – social, environmental and regional – and see the creation of jobs and renewed investment in forestry, processing, manufacturing, construction, and prefabrication."
Julie Collins, the deputy Director-General of Te Uru Rākau, said native timbers would also be used in the new facility, and artwork from Whakarewarewa School would help decorate it.
Jones said the hub tied in with Rotorua Lakes District Council's Wood First policy, "so we're right at home here".
He also announced a new request for research on innovative ways to use wood fibre, with a budget of $300,000.
Jones said consumers wanted alternatives to concrete, steel, and plastic and, in theory, everything that could be made from oil or non-renewable resources could be made from trees.
"The big question is one of commercial viability and how the big ideas can be made into reality."
He hoped the report would bring "innovation and employment to our regions, and increase onshore processing of logs" and "help establish forestry as the cornerstone of our future economy".
He said the country's One Billion Trees programme would act as a carbon sink in the short-to-medium term, "however they are also vital to increasing wood and fibre supply over the next 20 to 30 years".
Wood in construction - Timber is easier to modify and tweak during the construction process but requires more drying time after wet weather than other materials like steel and it moves as it dries out. - Wood is a lower cost raw material than steel and it doesn't rust. - Wood is 400 times better as a thermal insulator than steel and 14 times better than concrete. - Wood treated with the appropriate level of preservative, and properly maintained, can last in service for a hundred years or more. Source: NZ Wood