A $25 million high-speed gondola will be built at Whakapapa ski field, Regional Economic Development Minister Shane Jones has announced.
A $10 million loan from Provincial Growth Fund (PGF) will be granted to Ruapehu Alpine Lifts Ltd, with the remaining $15 million coming from local government and local investors along with the operator.
The project is being hailed as a boost for tourism across the central North Island.
The gondola will replace the national chairlift, with Mr Jones saying it "has capacity to safely and swiftly transport up to 2,400 passengers per hour to Knoll Ridge Café in 10 person cabins – a journey that will take five minutes".
Mr Jones said it will attract an estimated 500,000 additional visitor days by 2025 and increase the number of non-skiers visiting.
"As part of a suite of other projects, this could be transformative for the central North Island and the Ruapehu district in particular.
"The new gondola will enhance the upper mountain at Whakapapa and allow it to become a year-round destination, providing greater certainty for employers and stable employment for local workers.
"The project is part of a broader plan to boost visitor numbers to the Ruapehu and Taupo districts, and is expected to have significant economic and social impacts in those communities.
"The Gondola has the potential to be the linchpin investment creating the 'must do' attraction around which other investments would work."
Construction is set to begin in November, with the gondola likely to be in use by next winter.