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The building contract has been let to Stevenson and Williams, of Dunedin.
The project was expected to take six months, Stevenson and Williams foreman Jason Esplin said.
Fundraising for the project had reached $935,000, closing in on the target of $1million, East Otago Health Trust chairwoman Mary O'Connell said recently.
Fundraising was continuing and the trust was grateful for the many donations already made, she said.
The new centre will provide space for the three doctors in the East Otago Health practice, practice nurses, district nurses, a physiotherapist and administrative staff.
The centre will be built in front of the present health centre, which will then be demolished and replaced with a car park.
The present health centre was built in 1929, as a cottage hospital for the district.
The nurses' building will
be retained and refurbished separately, as accommodation for prime nurses on duty.
A helicopter landing pad will be built at the back of the property.
The doctors' consulting rooms would remain open at Palmerston, although they would be moved to the back of the present health centre building while construction was under way, East Otago Health practice manager Colleen Mackay said recently.
Surgery hours at the Waikouaiti Health Clinic would be expanded to full days, from Monday to Friday, while construction was under way.