Several hundred people gathered in the Octagon to watch dragon dancing, before parading down Princes St and through Queens Gardens to the Dunedin Chinese Garden.
There, the crowd swelled into the thousands as the brightly coloured costumes of entertainers mingled with the odours of culinary delights, the rhythmic beating of drums and, finally, a fireworks display.
Among those enjoying the festivities was Susan Xu, a member of the Dunedin Tai Chi Club but originally from Zhe Jiang, near Shanghai, China.
She moved to Dunedin four years ago to be with her son, who is studying at the University of Otago, and is now an international student herself.
Chinese New Year was normally a family affair, and Dunedin's celebrations were a good chance to get together and enjoy the fun, she said.
''We are very appreciative about ... the opportunity for us to celebrate together,'' she said.
Dunedin Chinese Gardens Trust chairman Malcolm Wong welcomed the crowd to the Year of the Pig, an animal which deputy mayor Chris Staynes said was a symbol of wealth and good fortune.
Those born in ''pig'' years were considered kind, generous, magnanimous, warm-hearted and considerate, and were leaders, he said.
The growing popularity of the celebrations was a sign of deepening ties between the two countries, as well as a recognition of historic links.
But the celebrations were also a family event centred on ''sharing food and having fun'', he said.
Christchurch-based Chinese Consul-general Wang Zhijian was also present.
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I had thought WW3 was starting, it sounded like there was a domestic shooting going on in the neighborhood.
Then I discover the banging was due to this, why were we not notified?, I read nothing about fireworks being set off.
What makes it right that these people are able to set off fireworks with no notification yet if ordinary people want to celebrate and let off fireworks, it's increasingly frowned upon.
Even the Dcc fireworks display wasn't as loud as this.