The building will house a heritage and visitor centre, a cafe, camping ground office, public toilets and a small theatre, set in a landscaped garden with a car park.
The $5 million development is being led by the South Catlins Charitable Trust, with support from the Southland District Council, the Department of Conservation (Doc) and local iwi.
Trust acting chairman Paul Duffy said on Tuesday a grant of $500,898 from the Lottery Environment and Heritage Fund, plus contributions of $850,000 from Doc and $800,000 from the Community Trust of Southland and fundraising, meant there was enough money to begin construction.
Further funding applications were in the pipeline, he said.
"It is possible we will have to take out a loan but we will avoid that if we can.''
To avoid disrupting sensitive yellow-eyed penguins during their breeding season, construction needed to be carried out before October, and design-build contractors Calder Stewart hoped to begin next month and be largely finished by then, he said.
An estimated 100,000 people visit Curio Bay each year to view the petrified forest, yellow-eyed penguins, Hector's dolphins and sea lions.
Mr Duffy said the centre would provide much-needed visitor facilities and education about the petrified forest and local wildlife.
The centre had been a dream for the trust for 12 years and it had been a "long ordeal'' getting to this point.
"We're excited and nervous. It's a lot to pull together. The community has waited for this for a long time and now we are just about to deliver.''
The heritage centre is one of several interlinked developments in the bay.
The trust had bought a building that would be converted into a camping ground ablutions block over the winter, containing toilets, showers, a kitchen and a laundry, Mr Duffy said.
Part of the lottery grant would go to paying for land opposite the heritage centre on which the trust had established a forest and bush walks.
However, he said it was the Southland District Council's decision to spend up to $1 million on a wastewater treatment plant at Curio Bay that had allowed the other projects to proceed.
Construction tenders for the plant were about to be advertised and construction would happen before summer, Mr Duffy, who is also a Southland district councillor, said.
