Mr Hernandez said the money OUSA was giving to the station would be used to upgrade its broadcasting and production equipment.
Asked what had changed since 2011 - when a campaign to save the station was launched after OUSA said it was looking to sell it - he said: ''We have been working closely with Radio One to try and improve it and make it more relevant to students.''
The decision to give the funding was a ''vote of confidence'' in the efforts the station had made to become more relevant over the last two years.
''Radio One is important to a large segment of students. OUSA contracted Research First to investigate how Radio One was doing in 2012. This research of more than 1550 responses showed 32% of students listened to Radio One. Two-thirds were satisfied or very satisfied,'' he said.
Asked if it was possible that OUSA would look at selling the station in the future, he said: ''I don't think OUSA is looking to chop any of its services right now''.
When OUSA was investigating the sale of Radio One, there were fears the passing of the Voluntary Student Membership (VSM) Bill would lead to a drastic reduction in income, which proved not to be the case. The university had stepped in to fund its services, he said.
Radio One station manager Sean Norling said the funding was ''fantastic'' and would bring its production and broadcast studios in to the 21st century.
''We turn 30 next year, so it's like an early 30th birthday present for us,'' Mr Norling said.
The new facility would allow more bands to record in its studio and allow the station to play a larger role in the music culture of Dunedin.
OUSA's threat to sell the station in 2011 rallied staff and volunteers to make it better, he said.
''We have worked really, really hard to engage with students,'' he said.
