The contract to build a multi-million dollar car park on Whangārei's Pohe Island has been awarded.

At a full council meeting last week councillors approved the contract, worth $2,501,179.25, to be awarded to Clements Contractors.

It received two tenders for the job and after following its tender evaluation method, opted for Clements Contractors, whose was the lower of the two tenders. The engineers' estimate for the job was $2,389,379.23.

The project will see the construction of 272 car parks with associated earthworks, stormwater, lighting, power, water and CCTV services.

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The car park will be built on top of the existing carpark behind the Madhatters Football Club and the Whangārei Rock'n'Roll Club. The clubrooms will remain where they are.

Whangārei District Council project Engineer Damien Wilkinson said the gravel that is already there is the subgrade, or sub-base material for the planned car park.

"It was put there explicitly to expedite the project this season."

Wilkinson said construction of the car park would start in January and take four months to complete. The construction of the car park is part of the Pohe Island Master Plan.

Northland Rugby Union and Old Boys Marist are also to move on to Pohe Island and build a new home as part of a longstanding agreement with the council.

Earlier this year the council agreed to give Northland Rugby Union $600,000 towards its development on Pohe Island. That was on top of the $450,000 it had already set aside, bringing its total contribution to $1,050,000.

The NRU development was expected to cost around $3 million, and would include a gym, clubrooms, toilets, a cafe and office space.

In October last year the council signalled its intent to lease 5.7ha of William Fraser Park, also known as Pohe Island, to Bike Northland for a bike park. The move allowed the organisation to seek external funding.

Council staff said they would help with resource consents for the portion of the park which will be freely available to the public but Bike Northland would need to organise funds for design and consents for the development of the former paper recycling facility which will not be freely available to the public.

The Pohe Island Sports Hub was one of five facilities to get a slice of Northland Regional Council's first allocations of the Regional Sporting Facilities Rate in September.

The hub is due to receive due to receive $1.18m spread over two payments in 2021 for its plan that includes both bike park and rugby facilities.