It sounds like a cute initiative, but creating an underpass for penguins in Oamaru is no walk in the park.

The Blue Penguin Colony and Waitaki District Council have confirmed the underpass is under construction.

It's being built by SouthRoads, the pipes are being donated by Hynds while Network Waitaki are relocating their underground services for free.

Waitaki District Council roading manager Michael Voss said there is a lot they have to negotiate underneath the road.

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"Storm water, waste water, water connections through the road, electricity, telecoms -- it's been quite a challenge to bring them all together in reality but we've got there."

The underpass is the first wildlife underpass in the country.

Mr Voss said it is significant and will improve the area's penguin-friendly reputation.

"It certainly ties in with Oamaru's position, I suppose, as the start of the penguin trail, and the amount of visitors we do get coming through to see the Little Blue and Yellow Eyed Penguins we do have in this area."

The underpass is set to be finished by the end of next week.