NZTA projects team leader Simon Underwood said the new bridge was estimated to cost up to $19 million.
A tender for bridge design closes later this month. Mr Underwood said a timeframe for construction would be known once the annually revised state highway plan was published for the 10 years starting July.
Construction of the bridge was expected to remain in this plan.
"The existing bridge is sound and is not a route security risk. The reason for replacing it is not safety, but to cater for future growth in this area which would be much better served by a two-lane bridge."
Mr Underwood said the existing 1926 bridge would remain, because it was built on top of the Lake Wakatipu outlet control structure.
The new bridge would be built downstream over the Kawarau River.
Over the past five years, the cost of maintaining the New Zealand Historic Places Trust category 1 bridge has averaged about $50,000 a year, "and that is about what we would expect for a bridge of this age".
The new bridge is in a priority queue, with all other Otago regional projects, under the national land transport programme.
The programme is updated every three years, with the next review due in 2012-13.
It is understood the Kawarau Falls bridge has been in the NZTA's 10-year plans for at least five years.
Resident and former Kelvin Peninsula Community Association chairman George Singleton said most residents would be pleased with the "certainty" of the news of a five-year minimum timeframe for construction of the new bridge.
Although traffic lights on the bridge had made it "satisfactory", he said a new bridge was "long overdue".
Mr Singleton said as long as the NZTA made a commitment and did not defer it, he was happy.
He said the existing bridge was "just a bottleneck".
"It's on a state highway and, although Rotorua might argue, it's in the premier tourist destination in the country. To have a rattly old one-way bridge is just not good enough, particularly when there's two five-star pubs on this side of the bridge," he said, referring to the twin Hilton Hotels expected to open at the $1 billion Kawarau Falls luxury resort in May.
