In 1907, the Premier, Sir Joseph Ward, sought cabinet approval for the approval for the building of a new steamer and in 1909, the Government announced its proposal to build a new boat for Lake Wakatipu. Finally, in September 1910, a tender of £20,850 ($41,700) was awarded to Messers. John McGregor and Co of Dunedin and construction got underway.
On 4 July, 1911, the keel was laid in McGregor’s yard in Dunedin and by 3 November,1911, the last plate was bolted on to the framing. The plates that made up the TSS Earnslaw’s shell were meticulously numbered, dismantled and then shipped to Kingston where they were put back together again.
Despite a labour shortage, the TSS Earnslaw’s hull was launched on 24 February, 1912. Although no special ceremony was arranged for the occasion, the launch was viewed by a large number of Queenstown residents. Many came from as far away as Garston and Athol. Among those present were the mayors of Queenstown and Arrowtown.
2 April saw the funnel and mast placed in position and on 3 August, the TSS Earnslaw set off on her first trial voyage under steam to Halfway Bay. She made her second trial trip on 20 August to Queenstown.
Friday, 18 October, 1912, was a day the locals had long been waiting for - the TSS Earnslaw’s first official voyage. On the day, special trains brought people from Gore and Invercargill to Kingston to enable them to travel on the TSS Earnslaw. She left the Kingston wharf with over 200 passengers as music from the Southland Pipe Band played, lit-up with with lights from bow to stern and decorated with flags and bunting. The Hon. J. A. Millar, Minister of Marine, commanded the steamer on her maiden trip.
At Queenstown the TSS Earnslaw was welcomed by launches, the Queenstown Brass Band and large throngs of people. Most of the onlookers were amazed by her size and for the next few hours, hundreds of them went on board to take a closer look at the TSS Earnslaw.
The next day was declared a public holiday so that locals could travel aboard the TSS Earnslaw. Over 500 people joined this special cruise to Glenorchy. The Glenorchy Wharf was packed with residents all eager to see the TSS Earnslaw. During the afternoon toasts were proposed to those who had helped make the TSS Earnslaw a reality.
On 21 October, 1912, New Zealand Railways formally accepted delivery of the TSS Earnslaw from her builders, Messrs. John McGregor and Co.