The Samoan government has agreed to partially fund the start up costs for the proposed joint venture between the national carrier, Polynesian Airlines, and Virgin Blue of Australia.
Last year, Samoa picked Virgin Blue over Qantas and Air New Zealand as a partner for international flights.
Samoa's finance minister, Misa Telefoni, says the start up costs for the venture are almost 5 million US dollars.
Misa says both parties have agreed to contribute around 2.5 million US dollars each.
He says this allocation will be included in the budget for the next financial year, due to be tabled at the end of May.
"What we're really looking to do is to stop the bleeding that's been happening over the years of continued reliance upon budget support. From the first year's operations, the projected profit is 4 million tala, so we're hoping for a 2 million dollar dividend."
Misa Telefoni says the new airline will be called Polynesian Blue and start flying in October.