UPDATE 4PM SATURDAY: THE building blocks of a new Bendigo hotel are being pieced together.
Construction began at 7am Saturday placing pre-built modules into a four-storey development at the site of the new Bendigo Hospital project.
By 10.30am more than eight modules had been lifted in by cranes.
The 66 modules will eventually become a 128-room hotel.
The structure of the new hotel on the corner of Bayne Street and Lucan Street was designed to be built within seven days.
Site manager Jono Frost said it could be completed even earlier than that.
"It should be finished by Wednesday or Thursday," he said.
"It's all coming together really well. The biggest advantage of these modules is you can put them together really quickly."
The 40metre by 3.6metre modules were built in a factory in Brooklyn, in Melbourne's west and trucked to Bendigo.
The project, by building company Hickory Group, is believed to be the first hotel in Bendigo built using a modular-design.
A number of onlookers stopped to take photos of the cranes as the work began.
Mr Frost said he expected the new building to generate a little bit of interest from the public.
"It's quite a good design," he said.
"I would say it's one of the more modern developments for hotels."
The hotel will be open to anyone - including members of the public and tourists, as well as families of hospital patients.