If the chicks survive, these will be the first kaka known to have bred successfully outside of Zealandia, where birds were released into the wild in 2002. Kaka were previously considered to have been extinct in Wellington since early last century.
Wellington City Council's Manager of Community Engagement and Reserves, Myfanwy Emeny, says that, coincidentally, the nest is close to a little stream where there is a population of banded kokopu - a species of native fish.
"So we have two special native species living and breeding in the heart of our city, it's a wonderful example of how people and nature can coexist."
Matu Booth, who runs a local community restoration programme and discovered the kaka nest, says the birds are part of a loose flock of kaka that has taken up residence the southern Town Belt.
"I'd been seeing the two kaka around the area where I live for at least a year. We know they're from Zealandia because they are banded and the database of recorded birds shows they hadn't been seen there since they were juveniles."
The male kaka is three years-old and the female bird is two, and in her first breeding season.
"In early October, I saw the pregnant female in my garden and then only saw her partner for several weeks. In late November I saw the two birds together, so I started searching for a nest in this part of the Town Belt where there are big old trees," says Matu.
He found the nest when he came across the male kaka feeding the female, and then watched her fly up and squeeze into the nest opening to feed her chicks.
Myfanwy Emeny says this part of the Town Belt is being restored as part of the Town Belt Management Plan, which includes a replanting programme.
"We're working with community groups to replant the area in native trees which will eventually provide nesting places for kaka when the forest matures.
"Kaka like to nest in natural cavities in old trees, with foliage cover to protect them as they approach and leave the nest. There's no original native forest with such cavities left in Wellington, so the kaka are nesting in other big trees. We may also consider installing some nest boxes to help them."
All going well, the chicks will fledge when they're about two months old, which should be in early January.