Nelson Airport is to build a new terminal that will replace the current earthquake-prone building and control tower.
The company's board of directors have accepted an independent report that suggests that the current terminal and control tower make way for a new building that can meet the region's future needs.
The Nelson City Council classified the terminal and tower as earthquake-prone with a section 124 notice, and issued a date of June 2024 in which to comply with new building standards.
The airport company is owned by the Nelson and Tasman councils, and details about project costs, design and a project timeframe were expected to be released early next year, Nelson Airport chief executive Robert Evans said.
"In the meantime we will be working closely with all airport users, the Nelson City Council, Tasman District Council and the community to make sure everyone is kept informed about the terminal construction project.
"We will be consulting extensively with the airlines and Airways Corporation (New Zealand's air navigation service provider) to ensure their future needs are accommodated where possible."
Mr Evans said the decision was made after analysing factors around a rebuild of the current facility and building brand new.
"The review was very comprehensive and we received compelling reasons why a new build is the best way to provide an airport of the future that will meet our region's growth aspirations."
Mr Evans said the current terminal was opened more than 40 years ago, but with recent airline announcements and forecast growth for the next 20 to 30 years, it was clear that it needed to be expanded.
He said more than one million passengers a year, and more than 300 flights a week, were forecast for Nelson Airport by the end of 2017.
He recently told Radio New Zealand that the airport played a significant role in enabling economic growth in the Nelson region, which is currently served by Air New Zealand Link, Soundsair, Air2There and lately Originair, which all operate scheduled commuter flights.
Hamilton-based Kiwi Regional Airlines and Qantas-owned Jetstar have confirmed plans to operate flights to and from Nelson.
Mr Evans said increased aircraft movements translated to increased revenue for the company, but the biggest impact was on the community through increased options and more competitive air travel prices.
"We're not here to decide who should fly in or not, we're here to enable others to do business."
The airport precinct also housed 35 aeronautical and support businesses, and a clear plan was needed to steer growth in a less ad hoc manner, Mr Evans said.
The company has regularly posted strong earnings resulting in dividends returned to its shareholders, and ultimately the region's rate payers.
Mr Evans said the board is aiming for $3 million annual earnings before deductions in the next year - a $300,000 increase on the past four years.