The sounds of music, drama and song will soon be heard from the heart of Hamilton's CBD, after the Waikato Regional Theatre received funding from Government this week, allowing construction to begin in 2020.

Prime Minister Jacinda Ardern announced today that the 1300-seat theatre will receive a $12 million investment from the Government, bringing funding for the project up to $69 million, and allowing ground works to begin. The final cost of the project is $74 million.

The 1300-seat theatre will be built in Victoria Street on the site of the Hamilton Hotel overlooking the Waikato River, next to Embassy Park. There will be a large stage, an orchestra pit and a public foyer with a performance area.

There will also be a $32 million hotel built on top of the theatre, while 300 jobs have also been created for the construction and operation of the hotel and theatre.

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The Waikato Regional Theatre project is led by regional community foundation Momentum Waikato, and started with Hamilton City Council approving $25 million in 2018, as part of the 2016-19 10-year plan towards the project.

The neighbouring Waikato councils have also contributed $5 million, while the rest of the funding is made up from the Government's investment, along with donations from the public. The theatre will replace Founders Theatre, which remains closed due to structural issues.

Ms Ardern, a Waikato local, said it was sad to have lost Founders Theatre, but it was fantastic to see a new theatre developed. "This is an exciting package for the region that will encourage tourism and ensure locals can enjoy the benefits of both home-grown and international cultural performances," Ms Ardern said.

"The theatre will also be a base for Wintec's performing arts degree, giving students on training courses a great venue to learn in.

Prime Minister Jacinda Ardern, with from left Ewan Wilson, John Gallagher, Ryan Hamilton, mayor Paula Southgate, Mark Bunting and Kesh Naidoo-Rauf. Photo / Tom Rowland
Prime Minister Jacinda Ardern, with from left Ewan Wilson, John Gallagher, Ryan Hamilton, mayor Paula Southgate, Mark Bunting and Kesh Naidoo-Rauf. Photo / Tom Rowland

"With a shortage of visitor accommodation, the new hotel means people can stay longer in the Waikato to take in the Hamilton Gardens, Zoo, Waitomo Caves, Hobbiton, and Waiwhakareke National Heritage Park," Ms Ardern said.

"We need to look at the economic and wellbeing benefits on our arts facilities. They help grow connections between communities and this project is a win win for the Waikato."

Momentum Waikato chief executive Kelvyn Eglinton said the theatre will be a catalyst for the Waikato as a hotbed of creative activity.

"The night-time buzz of the theatre and its built-in hospitality spots will a destination that will neatly complement the region's day-time tourism attractions, giving visitors good reason to linger in the Waikato and triggering the building of new hotels in the city," he said.

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Mr Eglinton said the theatre will celebrate the significance of the river to the mana whenua, through pouwhenua, tukutuku and other cultural decoration and treatments. "The heritage of the site will also be realised through the retention and enhancement of the Hamilton Hotel frontage, plus of course the Riff Raff Statue will continue to be the centrepiece of the Rocky Horror Show theming of the adjacent Embassy Park."

"Ultimately, the theatre will realise the dream of generations of Hamiltonians by decisively turning the city to the river.

"The foyer and courtyard event spaces will offer a sophisticated urban setting, looking out at the stunning vista of our Awa."

Labour MP Jamie Strange said the CBD location is important for the city.

"All significant global cities have theatres in the heart of their city. I am encouraged that a range of quality transport options will be available for people to travel to-and-from the theatre," Mr Strange said. "This is part of a wider project to turn Hamilton city to face the river.