It will also have major benefits for the economy of the city."
The aviation hub funding was part of a Provincial Growth Fund package for Manawatū-Whanganui of about $48 million.
The PGF would also support projects across sectors such as transport, food and beverage, digital connectivity and tourism and will help create new employment and economic development opportunities for the region.
"The largest investment is for KiwiRail to progress work to establish a regional freight hub near Palmerston North," Jones said.
"This builds on Palmerston North's strategic location within New Zealand's freight system and will add capacity required in face of predicted freight demand.
"Training and employment is also a key feature of the package with a $2.8 million investment to expand the National Driver Training Centre based at Manfeild, near Fielding. With support from the PGF, a full programme of driver training will be created to help meet demand for skilled drivers and machinery operators nationally."
In addition, Minister Jones also confirmed PGF support for a number of other projects in the Manawatū-Whanganui region, including:
· $100,000 to investigate FoodHQs development to assist food exporters
· $100,000 to assess alternative land utilisation choices in the Tararua District
· $98,000 towards Kaitahi Food & Innovation Factory
· $95,000 towards establishing an education, training and employment programme at the former site of Turakina Māori Girls' College
· $60,000 towards the Tararua Tourism & Trails Strategy
· $50,000 to investigate education to employment pathways within Horowhenua
"The PGF support towards these projects will help Manawatū-Whanganui progress work important to their region and ensure projects become investment-ready," Jones said
"This further demonstrates our Government's commitment to working alongside regions to fully unlock their potential and help take them to new heights."