The two organisations agreed to develop a link between the Kelvin Hotel and SIT's proposed neighbouring 47-apartment build to create a fully operational training hotel - a first for New Zealand.
ILT chairman Alan Dennis said the project would provide ''hugely beneficial'' opportunities for both organisations and the Southland community.
"Our aim would be to align the properties to create a training hotel and hospitality venue. It would add something really special to that corner.
"It's a fantastic opportunity to partner with SIT which, like us, is an organisation with the community's best interests at heart,'' he said.
Although there was a lot of work to do to develop the concept further, he was excited by its potential to provide value to the community, he said.
The Kelvin Hotel would continue to be a functioning hotel with the added quality of providing ''live'' training for SIT students in hospitality.
Dennis said it would ''add incredible realism'' to students' training and provide a classroom ''like no other''.
SIT chief executive Penny Simmonds said the initiative was a continuation of the collaborative efforts of SIT and ILT.
“It makes good sense for our iconic Invercargill institutions to be working together for the overall benefit of our community and we relish the opportunities that may come from this.”
ILT chief executive Chris Ramsay said there would be multiple benefits of the project for the organisation's 700 staff.
“From our perspective, it certainly has the potential to be the start of a tangible career path for employees ranging from front of house to executive chefs.
“One of the biggest challenges in the hospitality industry is attracting and retaining good staff. This could also provide a great training facility for our existing staff who want to upskill or diversify their roles.”
