The Government says it would still sign off on a deal for SkyCity to build a convention centre, even if an inquiry by the Office of the Auditor-General had not been completed.
Talks between government officials and the casino operators have been going on for a year. The proposal involves SkyCity constructing a $350 million convention centre in central Auckland in return for an expansion to its casino operation, including more gaming machines.
Green Party co-leader Metiria Turei asked the Auditor-General's Office to investigate the fairness and adequacy of the process and the party believes the Government should put the deal on hold.
Deputy Auditor-General Phillippa Smith will investigate the tender process, including how proposals to build the convention centre were sought and dealt with. It will also look at the adequacy of the assessment of the likely costs and benefits for each proposal.
Prime Minister John Key was personally involved in negotiations with SkyCity in the early stages and says he welcomes the inquiry.
Metiria Turei says it is a dirty deal and Mr Key and Economic Development Minister Steven Joyce will be be investigated as part of it.
"They have made the decisions around the convention centre. They have defended it, they have inflated job numbers, they have inflated the benefits to the country from this deal in order to sell it to New Zealanders because they know that their reputations are on the line.
"And now the Auditor-General is looking into whether or not they've done the right thing."
Ms Turei told Radio New Zealand's Checkpoint programme on Wednesday if the tender process is proven to be fair and transparent, it does not mean that the Government's ethics behind allowing more gaming machines are right.
She says if the process is considered fine, then she will have to accept the recommendation but says the law change is the ethical issue in the deal.
Labour Party leader David Shearer says the deal has been handled badly and is enormously embarrassing for the Government. He also believes it should be put on hold while the investigation is carried out.
Economic Development Minister Steven Joyce says the inquiry will be a chance to show that due process was followed in negotiations and if a deal with SkyCity was on the table, the Government would still sign it.
Mr Joyce told Radio New Zealand's Checkpoint programme on Wednesday he is confident the investigation will find that the Government has done nothing wrong in the process and negotiations with the casino operator will continue.
SkyCity also welcomes the inquiry and says it will fully co-operate in what it perceives has been a competitive selection process.
The Office of the Auditor-General says it does not comment on investigations which are underway.