Plans for a Wairarapa irrigation scheme received a boost yesterday with the announcement of $804,000 in fresh Government funding.

Primary Industries Minister Nathan Guy announced the support at a meeting in the 100-plus-year-old woolshed of a historic Greytown property belonging to the Kempton family.

The funding comes from the Ministry for Primary Industries' Irrigation Acceleration Fund (IAF), which helps kickstart projects around the country.

The Wairarapa Water Use Project hosted the meeting at the Kempton farm near Greytown.

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Mr Guy also announced a boost of $575,000 for the Ruataniwha scheme in Hawke's Bay, which he said he was "close to sending the diggers in" - and $250,000 for the early stages of another irrigation scheme in Gisborne.

Mr Guy said irrigation was "not just about dairy", but horticulture and viticulture also need access to water.

The Kempton Farm has been operating for the past 162 years and with Barry Kemp and his son Sid is now in its sixth generation.

It is one of three trial properties being used to model the potential advantages of an irrigation scheme under different land uses.

The 220ha farm is currently mainly used as a runoff with 32ha as a milking platform and about 69ha for beef farming.

Sid Kempton said, at full use, the property might need one fulltime labour unit, but it has been estimated that if it were converted to an apple orchard about 15 new jobs would be created.

Wairarapa Water Use Project chairman Bob Francis said Government support was "critical" to the scheme. Mr Francis said the governance group had met in Wellington on Thursday and signed off on the next stage of the scheme.

This involves recognising a primary site from the two which are currently being drilled to test geotechnical considerations.

These are Black Creek, in the Kaituna area west of Masterton, and Tividale in the Taueru catchment northeast of Masterton.

The scheme is at a "crucial phase", at the "start of a major farmer engagement process", Mr Francis said. After that, the next steps would be to create a governance set-up and then move towards consenting applications.

Mr Francis said 1150 new jobs could be created in Wairarapa due to intensified land use, with an extra $152 million added to the region's GDP (gross domestic product), with $52 million of that going to benefit Wairarapa households.

Wairarapa Water Use Project project director Michael Bassett-Foss said people "usually join the dots that irrigation equals intensified land use equals degraded waterways".

But Mr Bassett-Foss said new governance goals for waterways around New Zealand mean any change in use must "maintain or improve water quality".

He said "20 of the best modellers" of river ecosystems in Australia and New Zealand are running scenarios to ensure this goal is met with any irrigation scheme.

Mr Bassett-Foss said stored water could be used to flush Masterton's Henley Lake and alleviate its toxic algal bloom problem, or feed the urban supply.

The project now has to "assess farmer demand", preceded by "a huge engagement process to inform [farmers] about the opportunities and challenges".