The company behind plans for the country's largest data centre says building work begins Tuesday on the 49ha site in Makarewa, north of Invercargill.

Singapore-based Datagrid said the start of the "horizontal works" marked a major milestone in the project. It said New Zealand company HEB Construction - a subsidiary of international firm, VINCI Construction - had been contracted to carry out the work.

Datagrid said the works included a new access road connecting the data centre campus to State Highway 98 and upgrading existing roads.

Topsoil on the data centre site would be excavated and used to create a six-metre-high bund, which the company said would help shield the local community from construction noise.

It said the foundation platform for the future AI data centre facility, cable landing station and power substation were expected to be completed by the end of the year.

Datagrid NZ chief executive Rémi Galasso said the project's timeline was ambitious.

"Datagrid won't just be the largest data centre project in New Zealand, but also one of the most sustainable data centre projects of that scale in the Asia Pacific. We hope to demonstrate that New Zealand has all the ingredients to be a world champion in this industry."

Opponents of the $3.5 billion project worry about the centre's environmental impact, water use and noise pollution.

Last month, hundreds of people packed a meeting, organised by the Southland Sustainable Resource Coalition, to voice their concerns.

A second community meeting is planned for this week. The group wants some of the resource consents for the factory revoked, claiming none of Datagrid's claims have been independently verified and its proposal lacks key details.