The funding and administration of high-performance sport has been boosted by an extra $45 million over the next three years.
Prime Minister John Key announced the extra money on Friday, as well as the establishment of a new high performance institute within its sport funding body, SPARC.
A new board is being set up within the sport funding body SPARC to oversee how the cash is spent.
Sport and Recreation Minister Murray McCully says the country will reap the benefits at the 2016 Olympics.
Barry Maister - the former head of the New Zealand Olympic Committee and current member of the International Olympic Committee - says the funding is very welcome.
"You're talking about $20 million a year for as long as imaginable - initially mainly in infrastructure, moving more into support...
"It allows us to plan and allows our athletes to have opportunities they haven't had before, so we're wildly in favour of it and strongly support it."
The government will also contribute $15m towards the $40m expansion of the Millenium Institute on Auckland's North Shore, which will become the National Training Centre for High Performance sport.
The new money will also be used to help set up regional centres at Lake Karapiro, Takapuna and Christchurch.
It will boost annual funding to $62 million a year by 2013, compared to the current allocation of $42 million annually.
