This engine shed was built to house and service locomotives for the Midland Railways. It is a long rectangular building with a row of windows down one side and a gable roof. Built of concrete blocks, it is probably the earliest example of an industrial building in New Zealand constructed from concrete blocks. (Other engine sheds built for New Zealand Rail were built with timber and corrugated iron or stone.)

The Midland line, which this engine shed serviced, runs from Christchurch to Greymouth. It began as part of Julius Vogel's public works scheme of the 1880s. The Midland Railway Company Ltd began construction in 1886 on a line which was to run from Belgrove in the Nelson area, down the West Coast and through to Canterbury via Arthur's Pass. The Otira Tunnel, which is one of the major features of this line opened on 3 August 1923 and was then the seventh longest tunnel in the world. Concrete blocks were used in its construction, and some of the blocks, intended for the tunnel, were used instead in the construction of this engine shed.

This engine shed was one of two operative in Arthur's Pass during the 1920s and was initially used for electric engines. Electric trains were, from the start, used for the section between Arthur's Pass and Otira due to the length of the tunnel and this was the first electrification of a main line in New Zealand. The other shed, built in timber, was demolished in 1930. At that time the concrete block shed was fitted with smoke chutes and thereafter used for steam engines. Railway lines run through the building and there is an engine pit in the centre of the floor.

By 1964 the building was no longer required for its original purpose and was being used to store engines from the Railway Centennial Exhibition. In 1976 it was leased to the local community for use as a squash court.

The Arthur's Pass Engine Shed is significant because of the early use of concrete blocks in its construction and for the part it played in the operation of the Canterbury/West Coast railway line.