The Government is investing $1.5 million into Rotorua's historical QE Health and set to save 75 local jobs.

The funding will be taken out of the Provincial Growth Fund to ensure continued high-quality health service in the city, Under Secretary for Regional Economic Development Fletcher Tabuteau announced in a statement today.

The funding will go towards developing the $14.5m purpose-built facility which will remain on the wider lakefront site, near the intersection of Whakaue and Hinemaru Sts.

The Government is investing $1.5 million in Rotorua's historical QE Health set to save 75 local jobs. Photo / File
The Government is investing $1.5 million in Rotorua's historical QE Health set to save 75 local jobs. Photo / File

Rotorua Trust has also committed a $1m grant to the project as well as agreeing to underwrite a further $2m should additional funding partners not be secured.

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Tabuteau said the PGF top up recognised the significant impediments that Covid-19 created for the project, and enabled the final site preparation works to be undertaken in order for the new QE Health complex to be built.

He said the 75 "endangered jobs" at the health facility will be secured and there will be additional jobs created for the construction industry.

The funding was in addition to the $8m announced in March 2020.

QE Health was historically significant to Rotorua as a specialist clinical and rehabilitation provider with a 76-year history.

NZ First MP Fletcher Tabuteau. Photo / File
NZ First MP Fletcher Tabuteau. Photo / File

It was originally established for rehabilitation and care for injured soldiers returning from World War II. Services include cancer recovery, accident rehabilitation, clinical psychology and social work. Student and intern placements for health specialists were also done at the clinic.

QE Health chief executive Dr Aaron Randell said the focus could now turn to building a facility which better fit the service it was renowned for around the world.

"QE Health has been a part of Rotorua for more than 75 years and we now have certainty we can continue to support the community long into the future."

He said the new facility would not have been possible without the support of the landowner, the Pukeroa Oruawhata Trust.

"Pukeroa were really constructive in their negotiations with us which allowed us to remain as a tenant on their land which we are extremely appreciative of. We look forward to continuing to work with Pukeroa for future mutual benefit.

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Pre-building work is expected to start on the 3000m2 facility in July, with the operation open by the end of 2021.