Centre parents said they were "overwhelmed" with the support and generosity of more than 60 Wakatipu business owners, many of who are parents.
President Lara Fletcher, of Queenstown, said the playcentre had to fill a $3300 shortfall to remove lead-based paint on the exterior and repaint with modern coats.
"Although we've been awarded just over $10,000 by the Ministry of Education to remove the lead paint and repaint, we can't use that money until we know we can pay for the whole project.
"The ministry asked us to find 10% of the cost ourselves but another essential job cost $2200 and needed to be carried out first."
Lead-headed nails had been removed from the roof and the roof had been checked, she said.
Ms Fletcher said ministry funding amounted to less than 50% of the playcentre's annual running costs.
The centre was not on an equal financial footing with other early childhood education centres.
"There's a continuing need to raise funds to keep the centre running. Potential sources are local trusts applications or family funded efforts."
The Queenstown Playcentre Christmas Fair will be held on the lower Stanley St grounds on Saturday from 10am until 2pm.
Santa Claus will be on hand to hear Christmas wishes.
