The permanent block will feature five "learning studios" for years 5 and 6, and possibly years 7 and 8.
Board of trustees chairman Chris Duffy said it had been dealing with the Ministry of Education for about three years, getting funding in place to build the classrooms, which will accommodate 80 to 100 pupils.
Queenstown Primary has 608 year 0-6 pupils on its roll.
Six years ago, the school's roll was about 400.
Almost half of the classrooms are still relocatable.
"There has been a tremendous amount of work done by the property committee . . . to get us to this point.
"Schools are always fundraising for something, but it's the ministry's responsibility to provide funding for [projects like this].
"They should be great classrooms and they'll be very modern," Mr Duffy said.
At 7.45am yesterday, a service led by Darren Rewi, with Queenstown Lakes Mayor Clive Geddes and representatives of Arrow Projects in attendance, was held at the site.
A digger was moved in and the area where the block will be built - at the back of the school beside the Kiwi and Birdlife Park - had been roped off, Mr Duffy said.
The project was due for completion in December, meaning the new rooms would be open for the beginning of the 2010 school year.
In the meantime, if parents or caregivers were looking for their 5-year-old boys, Mr Duffy said there was a good chance they would find them beside the roped off area "staring at the diggers".
