The State Government has invested $2 million in the KPA Cell, which will encompass 11 pastoral leases covering about 2.4 million hectares, with the fence to stretch about 950 kilometres when complete.
State Agriculture and Food Minister Alannah MacTiernan said "sheep numbers in the region had dropped from more than 130,000 in the 1990s to fewer than 5000 nowadays - a result of wild dog predation".
She said the start of KPA Cell construction marked an important milestone in combating wild dogs in the Goldfields and in rebuilding a sheep industry in the region.
"Sheep meat and wool prices have skyrocketed and we want to see sheep returned to the southern rangelands as an income source for local pastoralists," Ms MacTiernan said.
"Restoring small stock to the Goldfields will drive diversification across the region, creating new opportunities for shearers, livestock transporters and local contractors.
"The KPA Cell project demonstrates the benefits to industry and regional communities that result from strong collaboration with industry, State and Federal governments and other stakeholders."
Construction of the fence will be co-ordinated by the KPA.
It will be built to wild dog standard, about 140 centimetres high with a lapwire, along existing pastoral station fencelines and access tracks.
Contractor Weaver Fencing has been engaged to construct the first stretch of exclusion fence, starting about 6km out of Kalgoorlie at an intersection of Mt Monger station and Lakeside Timber Reserve, following roll-up of pre-existing wire by Land Management Rangers from the Goldfields Land and Sea Council.
Kalgoorlie Consolidated Gold Mines Pty Ltd and the Department of Biodiversity, Conservation and Attractions are also contributing $10,000 each towards the cell.
KPA will report to the Department of Primary Industries and Regional Development on building and maintaining the fence, stock numbers and wild dog control.
The KPA Cell complements two demonstration cells in the Murchison and one in the West Gascoyne as part of the Rangelands Cell Fencing Program, co-funded by the State and Federal governments.
Pastoralists and Graziers Association president Tony Seabrook said cell fences had achieved positive results across the country and they were proving to work to stop wild dogs from attacking small livestock.
"They can be expensive to get up and so it's great that the government is putting funding towards this because pastoralists couldn't afford it on their own," Mr Seabrook said.
"It will be a real benefit to them if they are able to run sheep again in those areas."
Pastoral Region MLC Kyle McGinn said since coming to government, Ms MacTiernan has been delivering cell fences right across the regions.
"We need to continue to build new and support existing industries such as sheep farming in the Goldfields to boost employment opportunities," he said.
"Getting started on the Kalgoorlie cell fence is critical in giving pastoralists the confidence to return the southern rangelands to the mighty sheep producing area it once was."