Up to 40 fulltime roles are expected to be available once the centre opens.
Education Minister Chris Hipkins and Regional Economic Development Minister Shane Jones made the announcement today.
Hipkins said the modern and fit for purpose centre would help the region deal with the economic fallout of the pandemic.
"South Waikato has higher than average levels of social, education and health deprivation and a disproportionately high number of people not in education, employment or training.
"But employment opportunities exist through the trades and industries such as forestry.
He said employers were calling for more skilled workers and the facilities to train them.
"This new training centre will not only provide employers with the skilled workers they need, but it will give students a modern learning environment and the opportunity to upskill."
The investment is part of the Government's wider plan to keep New Zealanders working, training and help people find work, particularly in areas where there are skills shortages, he said.
This included boosting funding to make training in targeted areas and apprenticeships free.
Jones said the provision of funding through the CRRF demonstrated the Government's backing of the regions; to boost economies and create jobs.
"Māori make up nearly a quarter of the South Waikato population and more than a third of Tokoroa's.
"The new training centre's tutors, programme design, support services and pastoral care will have a focus on working with Māori and Pasifika," Jones said.
"South Waikato has been categorised as a 'mini-surge region' by the Provincial Development Unit to provide extra support to get people into work. This new training centre will make a significant contribution towards this goal."
