Jacindamania has arrived in Dunedin as the new Labour leader announced this afternoon the party would start construction on a new Dunedin Hospital in its first term.

Ms Adern said it would rebuild the hospital with existing funds and counted out a public private partnership (PPP), which was suggested by Prime Minister Bill English when he revealed National's plan for a $1.2 billion to $1.4 billion hospital rebuild on Saturday.

“This is a project that is long overdue for Dunedin.

"The hospital at present is dangerous and unsafe for staff and patients.

"Most of the existing buildings would not survive a severe earthquake," she said.

Labour would not build on the Wakari site and wanted the new hospital to be in the central city.

“With Labour’s approach we will have a new hospital as soon as possible and we will immediately form a group around the Southern DHB, the Ministry of Health, the Dunedin City Council, the Otago Regional Council and the University of Otago to agree on a vision for this hospital."

Previous experience showed PPPs did not work, she said.

“We reject the idea of a PPP as they have a disastrous record in the United Kingdom.

"The Mayor of London Sadiq Khan has condemned them as ‘a millstone around the neck’ of the London health system.

"PPP contracts will only slow the construction process down.

“There is enough money in the Government’s capital spending allowance to build the hospital without a PPP."

In a mark of Ms Ardern's popularity the University of Otago's Hunter Centre was packed 45 minutes before the announcement and at 2pm about 200 people were lined up outside waiting for a chance to see her.

Ms Adern spoke to those waiting outside before going inside the centre and was greeted with cheering and loud appluase when she made the announcement inside.

At one point the crowd began chanting Labour's campaign slogan "Let's do this".

The announcement is part of Ms Ardern's first visit to the city since becoming leader.

Ms Adern's announcement comes soon after Prime Minister Bill English revealed National's plan for a $1.2 billion to $1.4 billion hospital rebuild.

After the announcement Ms Ardern, swarmed by a crowd, took selfies with supporters and fans.

Dunedin Mayor Dave Cull welcomed the hospital announcement by the Labour Party.

"We will work with central government – whoever that may be following the election – and other key stakeholders to help facilitate a central city rebuild."