The worn-out 53-year-old community hub closed its doors on Monday for Otago-based Arrow International to begin the renovation.
Project manager Graham Johnson said the first stage of the work would be completed by December 21 so the rugby sevens could go ahead, using all but the main hall and stage, in early January.
"This hasn't made scheduling the works easy, but the project team recognise that the sevens are an important fixture in Queenstown's summer calendar," Mr Johnson said.
"There's a lot to do in a tight time frame to get open and functional for the sevens, but there's nothing untoward [in terms of challenges]."
The set-up of the construction area and demolition are among the first jobs. The most externally visible signs of progress will be work on the foyer extension and the two extensions at the rear of the hall.
The entire revamp is expected to employ up to 40 Wakatipu contractors and is scheduled to finish by February 28 next year.
Arrow International was awarded the $2,134,765 contract on Friday after "closely contested" tender negotiations, Mr Johnson said.
It took the total project budget to $3,114,765.
There were three tenders submitted, all with representation in the Wakatipu.
Arrow site construction manager Bruce Halligan said that it was a "fantastic community project that we are proud to be a key part of".
"We understand the time and budget constraints, and will be working with the project management team and Queenstown Memorial Hall Trust to meet both."
Queenstown builder Paul Sayer will be the project's working foreman and Arrow's Paul Johnson, project director.
Trust chairwoman Cath Gilmour said the hall trustees were delighted the past 17 months' work was coming to fruition.
"It's been a particularly frenetic last month and we are chuffed that this vital project is actually happening, thanks to huge community and council support."
The Central Lakes Trust committed $1 million, Queenstown Lakes District Council $992,000, Community Trust of Southland $400,000 and the Queenstown community $378,309 through pledges, fundraisers and in-kind donations to the upgrade project.
The trustees hoped the generosity would continue, Ms Gilmour said.
"We are still seeking pledges and grants and have more fundraisers planned as the trust has yet to raise $344,456."
District councillors agreed unanimously at an extraordinary meeting on July 10 to grant $500,000, on top of the capital upgrade budget already committed, from this year's Queenstown Airport Corporation dividend, plus extend a loan to the trust if needed.
