Speight's brewery in Dunedin is to replace its ageing coal boilers to reduce air pollution as part of a major site expansion.
Lion New Zealand says it has resource consent for the $29 million redevelopment, which will permanently shift tap beer and malt extract production from quake-damaged premises in Christchurch.
Four coal boilers at the brewery have been operating at full production for the past year, but the resulting black smoke is breaching an air pollution consent.
Following pressure by Otago Regional Council, Lion has agreed to replace the boilers with a cleaner-burning coal or gas unit.
The company is also bringing in a smaller, temporary gas boiler to tide it over.
Capital projects director Duncan Field says replacing the boilers was not the original plan, but it is the best solution for the company and the community.
The upgrade will create 16 permanent jobs, and work for up to 100 people during construction.
Otago Chamber of Commerce chief executive John Christie says the news is very welcome.