The decision comes after the trust behind it received a $15,000 grant from the Dunedin Casino Charitable Trust.
Dunedin Midwinter Celebrations Trust spokesman Paul Smith said the grant would enable the carnival route to be extended.
"The funding is a major development for the carnival, which is a victim of its own success."
The number of people attending the carnival in the Octagon had made it difficult for people to see the procession, Mr Smith said.
More than 15,000 people attended the carnival last year, he said.
"We will now be able to cater for even larger audiences, which is a great outcome for Dunedin."
The new route would take in parts of Moray Pl and Princes St and double the length of the procession.
People would be able to spread out on the new route and gain a better view.
The Midwinter Trust had been working towards changing the route for several years but the cost of turning off the street lights had been prohibitive, Mr Smith said.
Turning off the street lights was essential for the procession but was a complex procedure.
To make the new route possible Delta needed to upgrade the lighting infrastructure, which would enable lights along the proposed route to be isolated and switched off remotely.
The grant would allow the infrastructure upgrade to be completed for the carnival next year.
This year’s carnival would be on June 24 in the Octagon, starting at 5.30pm, the procession starting at 6pm.
It would be the last time the event would take place in its current format.
