Auckland Mayor Len Brown is proposing a 6.5 per cent rates increase today to spend more on transport.

Mr Brown has reduced the previous 3.5 per cent increase to 2.5 per cent.

But he has flagged an interim levy that equates to a rates increase of about 4 per cent.

The levy will cost households $99 a year and $159 for businesses.

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"Today we are responding to a clear message from Aucklanders," Mr Brown said.

He said the levy would be in place for three years and fund new investments of $500 million to meet urgent transport needs.

The levy replaces revenue from tolls and fuel taxes, which the Government is not prepared to introduce at this stage.

Labour councillor Ross Clow said on a rates bill of $3000 the new rates increase would add $98 and the transport levy $99, an increase of about 6.5 per cent.

He said the council had consulted on a household increase of about 5 per cent and now it was 6.5 per cent."We are backing down on what we went out to consultation on," Mr Clow said.