Even though the story involved "dodgy" characters, Mr Davis said that was not likely to damage the region's image.
"A study into [UK crime show] Broadchurch, which screened around the world, showed it did not have a negative impact on the small town in which it was set. If it is set in a beautiful place, it still enhances tourism," he said.
Richard Fletcher, joint managing director of Libertine, said the series would use a New Zealand crew and a local and international cast.
"A London police detective relocates to Rotorua with her husband and children, with the notion she is moving to paradise. In the tradition of shows like Twin Peaks and Fargo, the series explores the beauty, eeriness and dark underbelly of this small city at the end of the earth," Mr Fletcher said.
"The initial production is being developed as eight one-hour episodes but our vision is for it to become a long-running series."
Rotorua production company Velvet Stone Media director Lara Northcroft welcomed the series, which Mr Davis said intended to draw on local sources.
"It's awesome, great leverage for our industry down here. We do have an industry down here and we have been promoting that Rotorua is a great place to film. If it is a big production, we do have the skills down here and it is reassuring to know they will be engaging with the local industry," she said. Rotorua was chosen as the location for the "darkly eccentric" drama because of its sense of atmosphere, Mr Davis said.
"[Mr Cross] is fascinated with Rotorua. The whole atmosphere, the beautiful eerie landscape, makes it a phenomenal place to shoot the series," he said.
Mayor Steve Chadwick was also excited by the news.
"Rotorua will be the Downton Abbey, Twin Peaks and Fargo location of New Zealand," she said. The project will be financed by international licence fees and the Government's New Zealand Screen Production Grant.