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The project is still being evaluated but a business case for the new college, understood to be one of two residential halls in the pipeline for the university, has now been drawn up.
The construction project has a forecast completion date of March 2023.
The existing hall, Te Rangi Hiroa at 192 Castle St, was named after the university's first Maori medical graduate.
The building provides accommodation for up to 120 first-year students every year and faces an uncertain future on the same block as the planned new Dunedin Hospital.
Information on the development was contained in a report outlining progress of capital projects presented to the university council yesterday afternoon.
A university spokesman said it was not able to release any details.
At the end of 2018, an interim report from the Mayor's Taskforce for Housing contained information the university could develop two 350-bed buildings in future. However, the university also said it could not respond to that report at the time.
Chief operating officer Stephen Willis told university councillors yesterday the discovery of asbestos had delayed two other major construction projects.
Asbestos in one of the existing buildings had slowed the completion of the new $26million music, performing arts and theatre complex.
The development involves construction of a two-storey recording studio and performing arts centre and the refurbishment of the existing music suite, teaching wing, tower block and part of the education resource centre.
It had been scheduled for completion at the end of this year but is now forecast to be built by April 2020.
Asbestos had also affected the second stage of the $130million revamp of the university's dental school, the refurbishment of the Walsh Building.
''We're uncovering asbestos as we go,'' Mr Willis said.
The entire redevelopment, which had a deadline of mid-2020, is now forecast for completion in September next year.
The Walsh Building will house research and teaching laboratories, academic offices and student support services.