Functions would finish no later than midnight, with a final clean-up time of 1am.
The museum could host functions catering for up to 300 people.
Mr Brown said care would be taken to make sure the museum was "a completely controlled environment". Doors to the Don Stafford Wing and the northern part of the museum would remain locked.
Councillor Merepeka Raukawa-Tait opposed the idea, saying she was concerned about the many taonga stored at the museum, saying even "well heeled" patrons could get rowdy at times.
"There are irreplaceable treasures there that are significant to the people of Rotorua. I'm concerned about the security and safety of our beautiful museum," she said.
"I think you'll find the price would prevent the sort of people you are talking about ... we are looking at a higher class of people," Mr Brown said.
Deputy mayor Trevor Maxwell said it would be another drawcard to the most photographed building in New Zealand.