The funding will go towards development, consultation and testing options for the future management of Milford Sound.
Half a million dollars was also given to Te Manahuna Aoraki, to manage pests and restore land in Mt Cook National Park, Lakes Pukaki and Tekapo and the upper Mackenzie Basin.
The grants were two of 10 announced yesterday by the Ministry of Business, Innovation and Employment, totalling $18 million.
The mix of tourism and conservation projects is the first to be funded by the border levy, which came into effect on July 1.
Most international visitors are now charged a $35 levy, which is expected to raise about $80 million a year to be split between tourism and conservation.
Milford Opportunities governance group chairman Keith Turner said the funding was ''excellent news''.
Yesterday's announcement meant the group could ''press ahead'' with its master plan for Milford Sound and surrounding regions.
Its members include MBIE tourism general manager Ian Cossar, NZ Transport Agency director Jim Harland, Wayfare chief executive Richard Lauder, Queenstown Lakes mayor Jim Boult, Southland Mayor Gary Tong and Bruce Parks, of the Department of Conservation.
The group's goal was to uphold conservation values, reflect the unique nature of Milford Sound, increase revenue for local businesses and create wider opportunities for Te Anau, Southland and New Zealand.
Other projects announced yesterday by Tourism Minister Kelvin Davis and Conservation Minister Eugenie Sage
included funding a recovery plan for the critically endangered kakapo, building a skilled tourism workforce, preventing wildlife smuggling and finding a long-term approach to managing Westland as a destination.
Mr Davis said the funding from the international visitor conservation and tourism levy (IVL) would help to ensure tourism benefited and invested back into communities, the environment and visitors.
Ms Sage said tourism could champion and protect the natural environment which it relied upon.
''There is a strong desire from the Government, industry and the public for tourism to be a part of the solution for the substantial conservation challenges we face; especially the impact of invasive predators, and habitat loss and degradation,'' Ms Sage said.
''The IVL is a clear and significant step towards achieving this, and complements the conservation efforts many tourism businesses already make.''
About $42 million is expected to be invested in these projects over five years.
The long-term investment plan is expected to be released in October.
CASH FLOWS
The 10 projects to receive funding are:
- $3m to develop options for management of Milford Sound.
- $5.2m to improve awareness and perception of tourism industry.
- $3.9m to advance Westland as a destination.
- $0.3m to improve Arthurs Pass visitor experience.
- $1.5m to develop long-term management plan for kakapo, and establish three new habitat sites.
- $0.8m to eradicate pests from Auckland Island.
- $0.5m to manage pests and restore land at Te Manahuna Aoraki (Mt Cook National Park, Lakes Pukaki and Tekapo and the upper Mackenzie Basin).
- $1.2m to make Ruapekapeka Pa a visitor drawcard.
- $0.6m to improve visitor safety at Tongariro National Park.
- $1.7m to prevent wildlife smuggling, trade and importation of banned items.
- Additional reporting by RNZ
