''We are getting closer but there is more modelling to be done and more conversations to be had,'' group convener Pete Hodgson said.
''We are sure that we will identify the best site in coming weeks, all have their strengths and weaknesses.''
The group is examining possible sites somewhere between the University of Otago and the Octagon.
It expects to make a recommendation to Health Minister David Clark by the end of March.
Mr Hodgson created the panel earlier this month to ensure community involvement with the rebuild project.
However, its composition irked some Otago mayors, who felt the provinces were being shut out of the project.
A full list of those attending was unavailable yesterday as the official who took minutes was on the way back to Wellington.
Mr Hodgson said representatives from the Dunedin City Council, Otago Regional Council, the Southern District Health Board, Ngai Tahu, the NZ Transport Agency and the Ministry of Health were there, as well as a consultant engineer and a consultant architecture agency.
Issues considered included: traffic flows, DCC strategic planning in the CBD, heritage issues, pedestrian access, flood proneness, building sizes, and proximity to the university and commercial districts.
''We now have local expertise grappling with them. We have some pretty energetic engagement,'' Mr Hodgson said.
The Southern Partnership Group, which is steering the hospital rebuild, next meets on January 30, and the advisory group will next meet on February 20.
