The dam was the first of three to be built on the Waitaki River and was constructed without earthmoving machinery; over half a million cubic metres of material was excavated, almost entirely by pick-and-shovel.

Built during the Great Depression, the Waitaki Dam attempted to soak up unemployment as part of the Government's make work scheme and saw the trial of medical welfare where an individual could build a satisfactory life without fear of the inability to cope with age or poverty.

[2][4] The first State-built power station in New Zealand was constructed at Lake Coleridge in 1915 – designed to supply Christchurch and any additional consumer demand within reach of the transmission system.

[6] With Lakes Ōhau, Pukaki and Tekapo controlling 80% of the flow into the Waitaki River's headwaters, flooding was not expected to exceed 5380 cumecs, a low threat to the safety of any proposed dam.

[3]: 7  In its middle reaches, the Waitaki River flows through bedrock gorges of low-grade schists, meta-greywackes and greywackes of the Rakaia Terrane.

[11] However, the presence of coal on the Otago side (south) of the Waitaki River was of concern to engineers who felt it may act as a leak point beneath any proposed dam.

The Awakino site, 6 km (3.7 mi) above Kurow, had only 5 m (16 ft) of shingle to remove before solid basement was reached,[12] reducing the overall volume of material to be excavated.

The final site (Awakino) having been selected for the Waitaki Dam was announced by the Government in April 1928,[9][10] with an overly ambitious target for completion by 1931.

Seepage troubles at the North Island's Arapuni Power Station in 1929 caused additional concerns and resulted in a Swedish hydroelectric engineer, Professor Per Hörnell [sv], being brought to New Zealand in 1930.

While Professor Hörnell was specifically brought in to consult on remediation measures to be made at Arapuni, he also visited several other hydroelectric sites, including Waitaki.

[14][15] Despite most column inches at the time focussing on the exorbitant £4000 consultant's fee charged by Professor Hörnell,[16][17][18][19][20][14] his comments on the Waitaki were that its cross section was too narrow and that measures should be incorporated to ensure adequate foundation drainage.

[3]: 9  Nevertheless, his visit to Waitaki had the significant result of introducing New Zealand engineers to the problem of dealing with water under pressure within the actual structure of a dam.

[7]: 52  Paleoseismic studies on individual faults in the Waitaki area suggest that the recurrence interval of large earthquakes is on the order of thousands or tens-of-thousands of years.

[27][28] Packwood's task was to get the power station operational as quickly as possible and involved the completion of the dam across the Waitaki River followed by installation, testing and commissioning of the electrical and mechanical equipment.

Before any major works at the Waitaki site were undertaken, a camp was required to accommodate up to 1000 workers in addition to their families (up to 2000 people in total).

[3]: 10 [30]: 36  The harsh climate of the Waitaki Valley with its cold winters and strong winds, plus the long-term nature of the project, meant the Public Works Department opted for more permanent wooden accommodation in favour of their typical use of canvas tents.

[30]: 36  In addition to accommodation, the camp included a YMCA hall, post office, small shops, tennis courts and a football ground.

When the Electricity Corporation of NZ (ECNZ) moved its staff out in the 1980s, the remaining concrete block houses, hostel and environs were threatened with demolition.

The Government re-engaged as many unemployed men as possible, increasing the workforce to 900 in early 1934; this number was steadily reduced from August 1934 as the dam's construction reached completion.

Despite the last three sluice gates not having stopped head pond water flowing past them completely, the dam continued to fill, finally overtopping the weir on 28 September 1934.

The vast majority of the plant to be installed in the powerhouse was constructed overseas due to the lack of specialised manufacturing capability within New Zealand at the time.

[22][47][48][49] After almost eighty years of continuous operation, part of the refurbishment project saw the drilling of drainage holes in the foundation of the dam to relieve the hydrostatic pressure first raised as a concern by Professor Hörnell in 1930.

[3]: 43  The doctor for much of the project was Gervan McMillan, a young idealist who worked tirelessly for the Association and was to play an integral role in the development of the social welfare system trialled at Waitaki.

The construction of the Waitaki Power Station therefore played an important role in the origin of New Zealand's present Social Security system.