"There are only one or two others on a similar scale at the moment. A lot of pilots in the world now are being trained on the simulators, not in the sky," McDouall said.
The hub could also train other airline personnel, such as flight attendants and engineers. The addition of 288 students would be "transformative".
"The hub could really make commercial aviation training part of our Whanganui landscape. Not just pilots, right across the board."
The announcement also included $98,000 toward the Kaitahi Food and Innovation Factory, established by Ngā Rauru.
It will go toward a business case for a factory manufacturing food products based on local and traditional ingredients.
The factory will be in either Whanganui or Waverley, CEO Anne-Marie Broughton said.
The iwi has already had nine tonnes of its frozen smoothy drops manufactured elsewhere.
They are being sold in Auckland, Waikato and Wellington stores, and may soon be available at Countdown.
Rangitīkei iwi Ngā Wairiki/Ngāti Apa got $95,000 to find out whether there's a case for using its new headquarters in Marton, Te Poho o Tuariki - the former Turakina Māori Girls' College - for training, education and employment.
The centre will have its official opening in February.
"Hopefully we will have this piece of work done, that will help us know where we're going," chairman Pahia Turia said.
The announcement also includes $4.5 million to improve digital connectivity across the region.
It will come from the Rural Broadband Initiative Phase Two and the Mobile Black Spot Fund, and make broadband connectivity available to every rural marae, home, and business in the Horizons Region.
McDouall said the mobile black spots around Whanganui were already well known, and coverage was vital for business and safety.
The New Zealand Taxpayers' Union said Government should be giving tax relief to all businesses, rather than spending $48 million "picking winners".
