A new pool complex in Methven will receive $7.5 million from the government's Provincial Growth Fund.
Regional Economic Development Minister Shane Jones announced the investment in the Mid Canterbury business this morning.
Ōpuke Thermal Pools was expected to add about $162 million to the area's economy over 10 years and to create 120 jobs, Mr Jones said.
He hoped the pools would allow local retail and accommodation businesses to enjoy the benefits of tourism all year round, not just in the peak ski season.
"The Provincial Growth Fund is coming to the table to support a project which the community has shown us will make a big difference to their future economic prospects," he said.
Plans to build the spa complex near Mt Hutt Ski Field were first unveiled by Methven Adventures last year.
The facility will be the first in New Zealand to be heated by solar power and produce no emissions.
It will draw water from the nearby Rangitata Diversion Race, which is feed by glacial melt water.
The announcement comes after plans were unveiled late last year to construct hot pools in New Brighton in Christchurch.
In North Canterbury, Hanmer Springs Thermal Pools and Spa's facilities will be extended with five new pools and a 13.5m-high hydroslide later this year.