A new water park at Coffs Harbour's iconic Big Banana could be open within just a few weeks.

Those behind Coffs Harbour's new water park say they are filling a gap in the local tourism industry, left by the Aquajet more than a decade ago.

Assembly of the $1.6 million project is underway on site, with hopes it will be up and running within two months.

The NSW Government is contributing $500 thousand in tourism funding for the work.

General Manager Michael Lockman said they are hoping it becomes one of the region's major tourist attractions.

He said Coffs Harbour suffered when the iconic Aquajet closed down in 2005.

"This is far bigger and better than the Aquajet," he said.

"The Aquajet was the first waterslide constructed in Australia - it was very old, built in the 70's, and the technology was very outdated," he said.

"What we're building is leaps and bounds ahead - it's state of the art technology, we went to the other side of the world to get it built."

Mr Lockman said building a water park comes with its challenges, but it has all gone smoothly so far.

"It's quite a challenging site building it up the hill," he said.

"These days they build them on flat ground, but we had the hill there and we didn't want to waste space in the water park area.

"So they've pulled out all stops to get the civil works done, dealt with the rock and slope to get it all done."