He believes it will boost his exclusive Arrowtown course's chances of retaining and enhancing the New Zealand Open to the point it can be considered a mini-Masters.
Sir Michael first revealed his par-3 dream on the eve of the Open last year.
Now, with the tournament set to start at The Hills and Millbrook tomorrow, he revealed to the Otago Daily Times that the project was well advanced.
''We're in the design stage. We've got the routing, where the various holes will join up, and that's the most difficult thing,'' he said.
''John Darby is a genius and he's come up with a great routing.''
The course has been laid out on land below the 18th hole, weaving around an old water race.
There will be nine holes, with lengths ranging from 65m to 150m.
There are no real fairways planned, just tees and greens, with the land in between left in natural matagouri and browntop.
''It's far better land than even the main course. It's mind-bogglingly beautiful. There are uninterrupted views of everything.''
In line with his dream of turning The Hills into the Augusta of the South, Sir Michael hopes a par-3 tournament can eventually be held the day before the Open.
The project would take about three years, he estimated. He declined to say how much it would cost.
''It's not an economic thing to do. It's a silly thing, really. I just want to create something beautiful.''
''I get a whiff of Augusta here, and I don't think we're far off that standard.''
Sir Michael returned to a familiar theme when he urged the Government to raise its investment - close to $1 million in the Open.
''This isn't for my own gain. The money that comes into this area through tourism could increase tenfold.
''They should be fronting up with $5 million. Then we could get a player like Rory McIlroy. You are going to have to pay a million for someone like that but they are huge drawcards.
''We haven't got that money, so we rely on some Kiwi ingenuity.''
The Hills started to come alive yesterday as the 140 professionals drove, chipped and putted their way through a day of practice.
Final touches were being applied to ''Main Street'' - the shopping-socialising area next to the 13th hole, while the army of ground staff got out the clippers and polish.
The forecast is for mainly fine weather for all four days of the tournament.
