The country's largest film studio and sound stage will be built at Henderson in a $7 million joint venture between the Waitakere City Council and a property developer.

Work on the 15m-high sound stage starts in December at the council's Henderson Valley Studios, which were used for making last year's biggest-budget movie, The Chronicles of Narnia: The Lion, The Witch and The Wardrobe.

Mayor Bob Harvey said the project would be of international standard.

"That means we will be even more attractive to major overseas studios."

Henderson Valley's four studios have been fully booked this year with production of 30 Days of Night, a horror movie set in a small Alaskan town.

Film Auckland deputy chairman Pete Rive said the new facility was sorely needed. "With the drop in the dollar, there has been a rush of overseas interest.

"We have lost two or three productions this year to Australia because we didn't have the studios."

Mr Harvey wants to turn Henderson Valley into the "Hollywood of the South Pacific".

His comments yesterday included an endorsement for the project from Los Angeles-based producer and director Roger Donaldson, a New Zealander whose credits include The World's Fastest Indian, Species and No Way Out.

"New Zealand has stunning locations but in many ways locations can be recreated anywhere," Donaldson said. "What international projects really need are big studio spaces, and make no mistake - if you build it, they will come."

Donaldson said Wellington already had good studio space at director Peter Jackson's Stone St sound stage facility, which has more floor space than the Waitakere proposal of 2000 sq m.

But that sound stage is 12m high compared with Henderson Valley's 15m, which will take sets such as a double-storey house or a helicopter hanging from the rafters.

After a year of talks the council chose Tony Tay Group as its partner.

The group, which is building a $45 million hotel in Hobson St, Auckland City, will manage the studio construction and provide half the money,

The council will take a 44.5 per cent share in the management company to run the studios in exchange for land and buildings at the former fruit coolstore, which it bought in 2002.

In 2004, the Government approved a $2 million grant for Film Auckland under the major regional initiative scheme.

Mr Rive said Film Auckland thought the project was so important it would put $1 million of that grant towards the building.

The Auckland Regional Economic Development Strategy said the new Henderson facility would create hundreds of jobs and contribute $32 million to Waitakere City's economy over five years.

Walden Media, which helped to make the first Narnia movie, is also looking at building a state-of-the-art film studio in Auckland.