Construction began at 7am Saturday, when pre-built modules were placed into a four-storey development at the site of the new Bendigo Hospital project.

The 66 modules will soon become a 128-room hotel, with construction expected to be completed by Wednesday. 

Hickory business development manager Damien Crough said Bendigo was chosen to be home to the Art Series Hotel because the city was known for being artsy. 

"An artist will decorate the interior of the hotel," he said. 

"I think it will a huge tourism draw card."

Mr Crough said he expected the hotel to be opened by May. 

"This technology has been designed and made in Australia," he said. 

"It's cheaper to make, better quality and faster to put together."

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 was coming together well. 

"The biggest advantage of these modules is you can put them together really quickly," he said. 

The 13.76 metre by 3.86 metre modules were built in a factory in Brooklyn, in Melbourne's west and trucked to Bendigo. 

A number of onlookers stopped to take photos of the cranes as the work began on Saturday. 

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.

Mr Crough said although the project wasn't affiliated with the hospital, he expected staff would stay there.