The LBT Adaptive first light is foreseen for summer 2004. The first light AO system will be part of the Acquisition Guiding and Wavefront sensor unit (AGW) placed at the front bent Gregorian Foci of the telescope. The development and construction of the AO system is an undergoing process at Arcetri Observatory. The main features of the system are: the use of an adaptive secondary mirror with 672 actuators, the adoption of a pyramid wavefront sensor with a maximum sampling of 30x30 subaperture and the use of a small (400x320mm) movable wavefront sensor unit for reference star acquisition. After a brief description of the system the paper report about the progresses made in the design, realization and lab testing of the various parts of the AO system. In particular we describe the new beams configuration for the wavefront sensor board, the lab prototype of the sensor opto-mechanics, the sensor fast camera and its controller, the glass pyramid, the AO system real time and control software.