The provincial unions voted 89-1 in favour of the deal at a special meeting in Auckland yesterday.
NZR chairman Stewart Mitchell described it as a "monumental moment" in the history of New Zealand rugby.
The deal will lead to $37 million being injected into provincial rugby immediately.
The 14 National Provincial Championship teams will receive $1 million each.
The 12 Heartland unions will each get a $500,000 top-up, Maori rugby gets $2 million, community clubs will share $7.5 million, and the Players' Association gets $5 million.
It is a big pay day for everyone and, in addition to the $200 million deal, there will be an opportunity for New Zealand institutional investors to raise between $62.5 million and $100 million.
If there is insufficient demand, Silver Lake would increase its position to ensure a minimum capital raise of $62.5 million.
Both the Otago Rugby Football Union and North Otago Rugby Football Union chief executives welcomed the news.
Otago chief executive Richard Kinley said it was exciting news for rugby at all levels.
"But what it means for Otago rugby is it gives us a really strong platform to sit down with our stakeholders and co-create the future," he said.
That means reviewing the strategic plans ... and looking at what are the needs across the community. It is a real good chance to put the focus on our business and include our stakeholders.
"But what we need to be mindful of is that money always comes with responsibility and accountability. So whilst there is some increased funding, it is aligned to meeting some outcomes for New Zealand Rugby as well and that is focused on the community game.
"It is a really positive move."
"It is fantastic news for the community and grassroots rugby," Jackson said.
"It is going to allow our rugby to be sustainable, and for the first time in 95 years, we’ll have some reserves in the bank."
A lot of the funds have been earmarked for various projects already.
"I think we are the only provincial union in New Zealand that does not have lights at our main ground. With the ability to light up a venue, you can have TV there and play night games, and it just gives you so much more options, from [age group rugby] to Heartland.
"So some of this money will be used for capital projects similar to that.
"But the most important thing for us is to have reserves in the bank."
- Additional reporting The New Zealand Herald
