The flat at 660 Castle St was damaged by a suspicious fire early on May 14 last year.
University of Otago student Robby McPhail jumped from a second-storey window to escape the fire, breaking his ankle.
He needed surgery for burns to his body.
The flat is most famous as the a former home of band Six60.
Workers were seen at the student area flat last week.
Dunedin City Council principal adviser building solutions Neil McLeod said a building consent was granted in late November, with an amendment consent granted this month.
The consent allows changes to the internal layout and the addition of an extra bedroom.
An internal brick wall would be removed and replaced with a timber-framed wall.
Neither Mr McPhail nor the building's owner, retired Ashburton lawyer Brian Mee, responded to attempts to seek comment yesterday.
