The Gore District Council, which bought the site last year, will seek a slice of the Government's multibillion-dollar provincial growth fund to help build the development.
The proposal moved from investigation phase to developing detailed planning after gaining the approval of the Southland Territorial Advisory Group, the Southland Mayoral Forum and the Gore District Council this week.
No ratepayer funding would be used for the project, but its viability hinged on securing funding from central government, council parks and reserves manager Ian Soper said.
The arena would be about 80m by 60m and 12 ecofriendly accommodation units would be built. There would also be parking space for mobile homes and horse floats.