In 2008, Richard Pringle told the Otago Daily Times he believed the water wheel could be repaired and developed into a tourist attraction and he was prepared to give $10,000 towards its restoration.
Mr Pringle, who grew up at Maheno and has lived in Australia since the 1970s, believes the wheel is the largest in the southern hemisphere.
In her annual report to the North Otago branch of the New Zealand Historic Places Trust's annual meeting last night, chairwoman Carol Berry said discussions with Mr Pringle had resulted in a charitable trust being created.
An application had been lodged with the Lottery Grants Board for funding to enable a conservation report and work plans to be drawn up for the wheel's restoration.
The 10m-diameter water wheel, a remnant of the Phoenix Flour Mill, was installed in 1878 and its 84 iron buckets were made at the local foundry of Jack, Steel and Hendry.
The mill building was removed in 1905.
The water wheel, which was on reserve land, was the largest in situ of its kind in the country and the trust would seek to save it from disintegration, Mrs Berry said.
As a relic from the district's grain boom in the late 19th century, it would complement the district's other agricultural heritage sites, such as Totara Estate and Clarks Mill, and the warehouses in the historic precinct.
