Connected to classrooms, the stations would allow teachers' classes to be monitored by a senior colleague.

Deputy principal Jan McClure said the observation stations in other areas of the school had helped improve teachers' classroom performance.

"That's proved to be a great a (way) for us to continue to improve our practice," Ms McClure said.

"We find that you need to provide specific spaces for that to happen, and incorporate the use of video and recording facilities so that practice can be reviewed, shared with others and discussed."

Contracts for the construction of the new building were signed by the school's board chairman David Sewell yesterday.

Preparation of the site has begun, with construction to begin later this month. The facility was expected to be completed by July next year.

Ms McClure said the project was one of the largest undertaken by the school in its 144 year year history and would address a need for more senior school teaching space.

"In recent years, the senior school has grown in size and we've had quite a demand for places in years 10, 11 and 12,"she said.

The building will include six classrooms, the renovation of two existing classrooms, a 200-seat lecture theatre, plus study and office spaces.

It will also be situated close to the college's music and performing arts centres.

Project architect Stuart Swann said the centre incorporated a number of energy-saving initiatives, including hydronic heating pipes, natural ventilation in classrooms, and computer controlled louvres to control airflow.

Rainwater capture, reuse of rainwater for toilet flushing and waterless urinals would also be featured.

The Ballarat & Clarendon College received a $500,000 Federal Government grant to complete the project.