A major New Zealand Government investment in tourism in Niue has been announced by Foreign Minister Murray McCully who is visiting the Pacific Island nation.

The government will invest $7.5 million in the expansion of the Scenic Matavai Resort, he said.

Tourism was the largest contributor to economic growth in Niue, and was key to putting the country on the path to self sufficiency, Mr McCully said.

The funding will see another 20 rooms built at the resort, along with small conference facilities.

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This builds on New Zealand's total investment of $18 million since 2009.