Wellington City Council (WCC) has agreed to underwrite the World of Wearable Arts (WOW).
The decision was made in a public excluded part of a council committee meeting this morning, as the issue is commercially sensitive.
WOW needed the underwrite from WCC so it could have the confidence to embark on selling tickets and spending money to put the show together.
The council's underwrite supports the event against the risk of any further Covid-19 lockdowns.
The decision was unanimous and the deal includes WOW staying in Wellington for at least the next five years.
Mayor Andy Foster said WOW is critical to the city's arts and culture and economic infrastructure.
"Without an underwriting agreement, the WOW board would have been imprudent to proceed and it is likely we would lose the event. That cannot happen," Foster said.
The event is worth nearly $28 million to the local economy and is considered an economic highlight for the city's retail and hospitality sector which, for some, eclipses the busy Christmas trading period.
"The arts and culture sector is also a critical employer for a significant part of the year for people including entertainers and performers, but also those who support them through the likes of sound system installation," Foster said.
City councillor and arts, culture and events portfolio lead Nicola Young said part of the deal involved WOW promising to be exclusive to Wellington for the next five years.
"It was very important that we keep it because Wellington is going through a pretty difficult time right now and it's an event that is joyous.
"It's a really important part of our arts and city scene. The city comes to life with lots of people spending money, walking the streets, enjoying Wellington - and it's a fantastic show."
WOW is New Zealand's largest theatrical production attracting about 60,000 people annually.
It is also a sought after competition for international designers working at the cutting edge of fashion, art, design and costume, alongside students and first-time entrants.
Since 2005, when WOW first opened in Wellington, almost 6800 people have worked on the show attracting a total audience of more than 700,000.
WOW Chief Executive David Tingey said they were delighted to shore up support from the city council.
"We can now confidently continue with our planning and investment in the 2021 WOW Awards Show which have been underway since mid-2020.
"Preliminary indications regarding entries to the 2021 WOW Awards Competition are looking very positive. We are confident that our year off and, given the global environment, we will see the some of the most inspiring works of wearable art that have ever adorned a WOW stage."