As part of the upgrade, a new portable stage - funded by the 12 Days of Christmas grant - has been purchased.
The stage can be split or extended, depending on what is taking place at the time - such as a school production, a musical competition or conference.
Queenstown Memorial Hall Trust chairwoman Cath Gilmour said the hall was very much valued and used by the local community, so it was fitting that it finally got some attention.
"It was pretty run down for a long time. It's our one and only performing centre in town so it's something we really do need as a community," Ms Gilmour said.
"The stage and a raised roof above the stage will mean we can get modern lighting systems and sets in.
"It will just be a more sophisticated place for productions and theatre shows."
Auckland Airport general manager corporate affairs Charles Spillane said they were pleased to be able to help the Queenstown community.
"The Queenstown Memorial Hall is an important historical building that is home to a wide array of events and we are pleased to help make the hall a more usable and enjoyable place for the whole community to appreciate."
Airport windfall
This Christmas, the Herald is again featuring charities which have been selected for a $10,000 donation from Auckland Airport. The $120,000 to be distributed came from change donated by travellers this year.