Construction of a major new men's prison has begun in the South Auckland suburb of Wiri.
Corrections Minister Anne Tolley marked the occasion with a symbolic turning-of-the-sod ceremony.
Ms Tolley got behind the wheel of a 35-tonne digger to scoop up the first dirt from the site, which adjoins a women's prison built six years ago.
She says the two-year, $840 million construction project will inject 1000 jobs into the local economy, with 300 long-term positions created once the jail opens in 2015.
The 960-bed prison is the first to be built and managed under a public-private partnership model.
The British company Serco will run it.
Serco has been criticised for its management of Mt Eden Prison, because it only met 48% of targets set in the first year of operation, and had two escaped prisoners and three let out early.
But the minister says she is confident the company will run the new prison effectively.