Earthworks on the $120million-plus Arrowtown Lifestyle Retirement Village start next month.
It will occupy 12ha on McDonnell Rd, beside The Hills golf course.
The operators are poised to release a second stage, ahead of schedule, after selling nearly all 28 stage 1 villas.
Managing director Aaron Armstrong said more than 85% had been reserved by senior citizens already living in the Queenstown Lakes district.
''This reaffirms our belief that there is a strong need for a lifestyle village in the region.
''It is our intention to build a village for the people of Arrowtown and Queenstown with strong connections with the community.''
In return, Mr Armstrong said local suppliers and consultants were being preferred wherever possible.
The first villas will be completed by mid-2018. The initial development will also include an interim residents' lodge for stages one and two. This will have a fireside lounge, residents' bar, library, meeting room, gym and spa.
Down the track, there will be a 1000sq m community centre.
As well as 120 villas, there will be 75 apartments and a 100-bed aged-care centre.
The village is being developed by the Armstrong and Anderson families, who were behind the Aspiring Lifestyle Retirement Village in Wanaka, along with the land-owning Monk family.
Meanwhile, the first concrete slabs have been poured at the other local retirement village, the $500 million Queenstown Country Club on Ladies Mile.
Developer Sanderson Group aims to complete about 20 houses by the end of this year.
Ultimately, it will build 235 houses, 97 apartments, a rest-home, hospital and dementia-care facility and extensive commercial facilities.
To date, more than 80% of its buyers have been local retirees.
-By Philip Chandler
