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The June 2013 flooding caused slips around the city and closed dozens of roads across the region, including State Highway 1 to the north.
Dunedin City Council project engineer Evan Matheson said yesterday the council had worked with the Earthquake Commission and private insurers on the slip.
It had also spent significant time doing geotechnical assessments to understand why the wall had failed, so the new wall could be designed appropriately.
Mr Matheson said the previous wall, built about 100 years ago, was not a retaining wall, as such.
As well, old drains behind the wall had become blocked over the decades.
The new wall would be made from pre-cast concrete panels, anchored deep into the ground to make it ''nice and strong''.
The work was ''predominantly a council job'', as it was responsible for the wall, although about half of the cost would be paid by the New Zealand Transport Agency.
A house near the slip was ''quite stable'', Mr Matheson said.
Work began last week and was expected to be finished in October,