Lincoln University expects to have the South island's first dedicated dairy research farm operating by August.
The new 56-hectare farm stocked with 170 cows will be located across the road from the central university campus.
University vice-chancellor Roger Field says it is the right time to develop a dairy research farm because there is a need for more dairy research and teaching in the South Island.
Lincoln runs a 186-hectare commercial demonstration dairy farm at present.
Soil science professor Keith Cameron says research will be carried out on the new farm which is not possible on the demonstration farm.
He says the work will include studying the effects of different feeds on animals, to improve their productivity, health and reduce the impact of dairy farming on the environment.
"A key challenge for us will be to produce higher yields of high quality feed with a better balance of nutrients provided within the entire lactation reproductive cycle and at the same time reduce the risks of greenhouse gas emissions and nitrate leaching and other environmental impacts."
Professor Cameron says the research farm will also be a working dairy farm, with a highly automated dairy shed and will sell the milk it produces.
