Otago Peninsula community board chairman John Bellamy said the jetty, a portion of which had survived from the original 1870 structure, had not been suitable for ferries since the 1940s.
The Dunedin City Council was going ahead with the development because community fundraiser Portobello Inc had acquired the agreed proportion of the $382,000 project, he said.
The jetty would be demolished and replaced by a timber-piled wharf with concrete decking and a steel berthing pontoon, constructed by Amalgamated Builders.
Mr Bellamy said he was pleasantly surprised the council had indicated the work would start this September, and be finished in early summer. The jetty presented huge opportunities in tourism and recreation, as Portobello tended to miss out through the lack of a serviceable jetty.
The development created links to Port Chalmers and Quarantine Island.
Portobello Inc chairwoman Christine Neill expected an increase in the number of casual visitors to Portobello, supporting businesses and livening up the village in the warmer months.
The newly restored harbour ferry Elsie Evans was just one of many vessels the jetty could welcome, she said.
Coastguard Dunedin would also be able to use the facility, and in time, depending on further reclamation and development, the jetty could become its base.
Portobello Inc member Luke McClelland said the fundraising group had had to work hard to obtain funds because of the Christchurch earthquake, Rugby World Cup, and tight financial times. A small amount was still to be raised, but community events would be held, rather than approach funding trusts.
Portobello's history was closely linked with the harbour, and the new jetty restored safe access to it, Mr McClelland said.
Wood salvaged from the demolition would be put to use in the community, for carvings and other decorative uses.
