The lighthouse was built from 1869 to 1870 and first lit on 4 July 1870. The tower was constructed from locally quarried stone. The lighting machinery that was installed in the lighthouse had come to New Zealand on the same ship as the lighthouse designer James Balfour in 1863 and was originally intended for the lighthouse at Cape Saunders.
With the project on Otago Peninsula experiencing many delays, the lighting machinery was used at Nugget Point instead. In 1901 Walter Hutton Champion was the first lighthouse keeper along with his wife Alice.
When the lighthouse was first built in 1870 it was powered by an oil burner but in 1949 the swapped the oil burner out for a electric 1000W lamp powered by a local diesel generator.
The nugget point lighthouse is complete with a walking track roughly taking 40 minutes.