The Otago Daily Times understands the funding will help cover the costs of running the event after it failed to attract a major sponsor.
The inaugural winter games, which will be held in Queenstown, Wanaka, Naseby and Dunedin between August 22 and 30, is being touted as the biggest winter sports event outside the Winter Olympics.
They are expected to bring an estimated $50 million in direct spending to the Otago economy, with more than 800 athletes and 300 officials expected to attend, and 300 volunteers required.
The games received $150,000 from the Community Trust of Southland in March, to be used to install state-of-the-art timing systems at Coronet Peak.
Before he opens the 35th American Express Queenstown Winter Festival at 6pm, Mr Key will take part in a tourism forum at the Crowne Plaza earlier this afternoon before making a "tourism announcement".
When contacted by the ODT yesterday, Winter Games NZ chairman Eion Edgar did not want to speculate but said the board was "looking forward to the prime minister's announcement".
Mr Edgar will not be present today because of a commitment in Auckland, while Winter Games NZ chief executive Arthur Klap will also be unavailable.
However, it is understood Winter Games NZ board member Rick Pettit would represent the board.
