The project is a joint Australian-Japanese venture that aims to add to the work of gamma ray satellites in determining the mechanics of black holes.
Sited on a former rocket range at Woomera, the £1.6m (A$4m) Cangaroo II telescope will scan the skies for gamma rays. This high-energy radiation is characteristic of matter being destroyed as it is dragged into a black hole.
The project is a joint Australian-Japanese venture that aims to add to the work of gamma ray satellites in determining the mechanics of black holes.
A further three identical telescopes are expected to be built, at a cost of £5.2m (A$13m). Linking all four together will give an even deeper view of the most violent parts of the Universe.
Big problem
"We will look for huge black holes at the centres of galaxies - they have an enormous effect on the energy of a galaxy, and how it evolves." said Dr John Patterson, Australian co-ordinator of the project at Adelaide University.
"They can be more than 100 million times larger than the mass our Sun, up to 10% of a galaxy's mass."
"From its centre, a black hole can also shoot out a jet called a blazar, like the axle from a wheel, and at huge velocities. Although we now have some theories about how they work, nobody really knows," he said.
Black holes are regions of such extremely dense matter that their intense gravitational fields prevent even light from escaping. However, the powerful magnetic fields that surround black holes eject giant jets of material which give off gamma rays.
When a gamma ray strikes the Earth's atmosphere, it sparks a cascade of particle decay, leading to a flash of blue light. This light is what Cangaroo II will detect.
Hundreds of holes
Ground-based telescopes in the Northern Hemisphere have already located and studied a number of black holes. But Nasa's satellite gamma ray observatory, Compton, has detected more than 250 blazars, suggesting that many more black holes await observation.
"This southern telescope will be able to provide new data on southern-sky black holes, that have never been studied," said Dr Patterson.
The new telescopes will replace Cangaroo I, a 3.8-metre gamma ray telescope. The first telescope was used to study pulsars and supernova remnants in our own galaxy which also emit gamma radiation.
The telescope's name, Cangaroo, is an acronym - Collaboration of Australia and Nippon for a Gamma Ray Observatory in the Outback. Woomera is six hours drive north of Adelaide.