Prime Minister Bill English and Greater Christchurch Regeneration Minister Nicky Wagner yesterday announced the Government would contribute an extra $120million for the construction of a multi-use facility in Christchurch.
That would take the Government's total contribution to $179million.
Dunedin Mayor Dave Cull said there was a limit to the number of events held in the South Island.
''Neither Christchurch or Dunedin should expect to get all of them.
''There will probably be less for both of us.''
Dunedin has recently secured concert acts including Ed Sheeran and Stevie Nicks and The Pretenders, expected to bring thousands of people and millions of dollars to the city.
Former Dunedin Venues Management Ltd chief executive Darren Burden, now in charge of Vbase, the company that runs Christchurch's council-owned venues including the AMI Stadium, said there was ''a long way to go yet'' before it was certain a multipurpose roofed stadium for Christchurch would be built.
''If it does, then I think it will have an impact in terms of the content that otherwise, at the moment by right, is going to Dunedin.
''Some of that will certainly flow Christchurch's way,'' Mr Burden said.
Ms Wagner said a new stadium would provide Canterbury with a flexible venue to attract a wide range of sports, entertainment and events to the city, and increase the number of visitors to the region.
''Our preference is for a 30,000 capacity arena with a fully closed roof.
''However, the configuration is ultimately up to the community and the Christchurch City Council.''
When combined with the funding the council had set aside through the cost-sharing agreement, the extra money meant there was already sufficient funding committed for a 30,000 capacity stadium with an open roof.
The Christchurch community might need to source further funding if they chose a more expensive option, Ms Wagner said.
Forsyth Barr Stadium has a capacity of 30,748 for rugby matches and 36,000 for concerts.
Its total construction cost was about $200million and the Government contributed $15million towards the project.
Ms Wagner said National's funding commitment gave Christchurch the assurance it needed to make an informed decision on the best option and would enable work to start next year.
Mr English and Ms Wagner made the announcement on the the old Lancaster Park site, formerly AMI Stadium, which was wrecked in the earthquakes.
Reaction online was swift and a lot of it was angry.
Many living on the east side of Christchurch are still battling to have their homes rebuilt after the earthquakes.
Roading is not as good in the east as it is in other parts of the city.
One blogger suggested the homeless could live in the new stadium.
However, Ms Wagner said it was not ''just any other stadium''.
''It's a central hub that will be designed to bring together the community and invigorate wider Canterbury.
''The multipurpose concept is critical because it will ensure the facility is well-used and cost-effective, with broader opportunities for events.''
The multi-use arena was the final anchor project and National was committed to getting it done.
Asked if he was concerned about the potential loss of money coming into the city from events at the stadium, Mr Cull said it was ''one factor of concern''.
''I'd have to say that just having the stadium doesn't guarantee that you get the event.''
Instead, it was necessary to pitch for events and manage them well, something Dunedin Venues Management Ltd had been good at.
''I'm confident they will continue, even in the face of competition, to attract high-quality economic events to the city.''
DVML chief executive Terry Davies did not respond to repeated requests for comment.
-Additonally report by Dene Mackenzie
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What is with people that they want a stadium? Or do they? Perhaps its just the businesses that want a stadium to make lots of money out of 'events'. Me? I'd rather have a home and garden. Trouble is we tax payers pay for the stadium whether we use it or not.