Once completed, Chernobyl will be safe, said Vince Novak, nuclear safety director at the European Bank for Reconstruction and Development which manages the $505 million project.
The new shelter is part of a broader $1.4 billion effort financed by international donors that began in 1997 and includes shoring up the current shelter, monitoring radiation and training experts.
The explosion at reactor No. 4 on April 26, 1986 was the world's worst nuclear accident, spewing radiation over a large swath of the former Soviet Union and much of northern Europe. It directly contaminated an area roughly half the size of Italy, displacing hundreds of thousands of people.
In the two months after the disaster, 31 people died of radioactivity, but the final toll is still debated. The U.N. health agency estimates that about 9,300 will eventually die from cancers caused by Chernobyl's radiation. Groups such as Greenpeace insist the toll could be 10 times higher.
The old shelter, called a "sarcophagus," was built in just six months. But intense radiation has weakened it, according to the U.S. Nuclear Regulatory Commission, and rain and snow are seeping through cracks.
Officials say a tornado or earthquake could bring down the shelter, releasing clouds of poisonous dust.
The first step, shoring up the sarcophagus, is almost complete, Ukrainian and EBRD officials say.
Later, the 20,000-ton arch - 345 feet tall, 840 feet wide and 490 feet long - will be built next to the old shelter and slid over it on railtracks.
Its front side will be covered by metal, and the back will abut the wall of reactor No. 3. Construction is to begin next year and be completed in 2012, and it is designed to last 100 years. It is designed and built by Novarka, a French-led consortium.
Workers will wear protective suits and masks, and those needing to be closer to the radioactivity will work in shifts as short as several minutes.
Once the arch is up, the least stable parts of the old shelter and the reactor will be dismantled and removed. In 50 years, the nuclear fuel will be extracted, although it is unclear where it will be stored.
The EBRD says 95 percent of the reactor's nuclear inventory is still inside the ruins, but some experts believe most of the radiation was released in the days after the accident.
The new shelter evokes mixed feelings among Ukrainians.
Some are just happy the reactor is finally going to be made safe. Others, especially those directly affected by the disaster, accuse the government of playing up the new shelter at the expense of treating their health problems.
Scientists continue to debate the Novarka solution, with some saying the reactor should be dismantled or embedded in concrete. Others say the government should be more concerned about the contaminated land, ground water and equipment, and the spent nuclear fuel.
This nation of 46 million gets almost half its electricity from 15 reactors at four power plants. None is of the Chernobyl type.
President Viktor Yushchenko wants to expand Ukraine's nuclear power industry, but environmentalists say the lesson of Chernobyl is that nuclear power carries hidden costs and dangers.
"Nuclear energy has shown how expensive it is," said Vladimir Chuprov of Greenpeace Russia.