The project follows council consultation with the community earlier in the year which showed overwhelming community support to lease a building.
Council chief executive Gareth Green says the project is hugely significant for the Taupō District, symbolising a true partnership between the council and Tūwharetoa.
"This is about creating an enduring relationship between council and the mana whenua of this rohe. Being a co-tenant in this building with three Tūwharetoa entities will also be hugely beneficial to our partnership work with iwi."
Te Whare Hono o Tūwharetoa chairman Rakeipoho Taiaroa says the project is an exciting development that will help mana whenua and local government work more closely together and to build a cohesive relationship for the future.
Green says the building will be built to Importance Level 4, with the seismic resilience for it to be used as an Emergency Operations Centre after a natural disaster and to enable vital council infrastructure to continue to operate.
It will also create extra efficiencies by bringing council staff, who are presently spread across five different sites, together under one roof again.
While today signifies an important step in the partnership, negotiations over key terms are continuing and any Agreement to Lease would be concluded early next year.
It's expected that construction would begin early 2023, with the building ready to occupy in mid-2024.