The Government has approved additional funding of $22.5 million will be made available for additional infrastructure for the America's Cup.
In addition to this, Auckland Council will consider providing a further $14.5 million for infrastructure as well.
Economic Development Minister David Parker said this afternoon Cabinet has approved the additional funds following higher-than-forecast costs for wave breaks and dredging work.
The extra funding is subject to Auckland Council on Thursday also agreeing to increase its contribution.
It would take the Government's contribution to the Auckland waterfront development to $136.5 million.
"This investment will ensure we deliver a great regatta in 2021, and negotiating to remove the tank farm off Wynyard Point will help revitalise the waterfront," David Parker said.
Auckland Mayor Phil Goff said the additional investment comes as a result of more accurate and detailed construction costs following final design work and the granting of resource consents.
Goff said he and Parker were satisfied that costs have been pared back as much as possible while still ensuring the successful hosting of the America's Cup.
On Thursday, the Council will consider providing a further $14.5 million to complete the infrastructure needed for the holding of the America's Cup.
"The eight new notices of challenges on top of the three confirmed original challenges points to a likely full occupation of the team bases," Goff said.
"Any competitors beyond the first six challenges accepted, as signalled from the start, will have to make their own base arrangements,"
Parker said the event, which is to be held in 2021, was estimated to provide between a $550m to $1 billion increase to the economy.
It would also return "significant tax income to the Government and provide wonderful opportunities to showcase our country, people and innovation", Parker said.
Goff appeared to agree.
"While requiring a significant investment by central and local Government, the Cup will create thousands of jobs and enable Auckland and New Zealand to showcase our environment, sporting skills and cutting-edge technology to the world,"
Today's announcement follows the Royal New Zealand Yacht Squadron and Emirates Team New Zealand (ETNZ) on Friday revealing that an additional eight notices of challenge had been received by the deadline.
An acceptance process will determine how many challengers will compete in the Prada Cup alongside Luna Rossa, American Magic and INEOS Team UK.
Before today's announcement of additional funding, the Auckland Council and the Government were spending $212 million on construction and running costs for the Cup - $114m from taxpayers and $98.5m from ratepayers.
On top of this, council was pouring in $55m of new money and bringing forward $53m of expenditure on a raft of projects to spruce up the waterfront for the Cup and Apec conference in 2021.
Parker said many of the people who developed ETNZ's carbon fibre technology have gone on to develop carbon composites for Rocket Lab rockets and new technology from the R & D programme has flowed through to the general marine industry.
"The development will provide a legacy for Auckland and for New Zealand for years to come.
"The Government's investment represents a significant contribution to the major, multi-billion dollar rejuvenation of the Auckland waterfront that will be enjoyed by the city and visitors for generations – and by future America's Cup defences."
Parker said a detailed design and costing process for the Wynyard-Hobson infrastructure had been completed by Wynyard Alliance contractors as is standard for construction projects in order to finalise cost estimates against budgets.
He added that it is possible that if the final number of challengers is five or less, then savings can be made by opting to base them all on Wynyard Wharf and dispensing with plans to extend Hobson Wharf.
No final date has been set for the number of challengers to be determined. But ETNZ CEO Grant Dalton has said the organisers want to act quickly to tell the Auckland Council and Government the total number of teams.