Palmerston North is ready to hit the ground running following the sod-turning for the rebuild of the Central Energy Trust Arena early this morning.

Under level 3 lockdown a small group that included Mayor Grant Smith and Rangitāne iwi were at the ground-breaking ceremony.

Humphries Construction will oversee the rebuild with 25 subcontractors, of which 90 per cent are local.

On and off the site, 120 people will be employed.

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Mayor Smith said the CET upgrade will maintain Palmerston North as the lower North Island's premier multi-sports, training, display, entertainment and events centre.

"This wonderful facility is a regional taonga just 10 minutes' walk from the centre of the city and (is the) focus of council's Streets For People Cuba St refurbishment.

"The CET masterplan - of which this is the second stage following the successful launch of the artificial turf in 2019 - is only going to enhance its value to those who regularly make use of it, now and into the future."

Mayor Smith said the bespoke facilities will be in high demand by the hundreds of sports teams and sporting organisations, community and school groups, concert promoters, expo and conference conveners.

The rebuild will give an economic boost to local businesses, he said.

"Right now, in this time and under these circumstances, the need to boost local business activity and confidence has never been more essential.

"At this point, I want to commend all members of the Arena Masterplan Steering Group and Rangitāne iwi for their investment, input, expertise, and cooperation in seeing the project through: WT Partnership project director Warren Wilks, Chris Whaiapu and Wiremu Te Awe Awe of Rangitāne, Speedway's Bruce Robertson and Brian Puklowski, Paul O'Brien of Marist Sports Club, Sport Manawatū chief executive Trevor Shailer, Manawatū Rugby's Shannon Paku and Shane Harris of Manawatū District Council, councillors Vaughan Dennison, Leonie Hapeta and Susan Baty and PNCC's Sacha Haskell, Bryce Hosking, John Lynch, Dave Charnley and Bevan Trotman."

Mayor Smith also commended the design team for the "striking solution they came up with not just to better and more safely accommodate spectators around the pit area, but to shave $4.6 million off the budget, keep long-term operational costs down, and provide a striking architectural feature".

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Underscoring the rebuild is the extensive historical significance of the CET Arena site.

Ironically, in 1918 the Spanish Flu pandemic caused a wartime peace concert to be delayed which went ahead on the site in July 1919.