Ngai Tahu Holdings and TrustPower have signed a Memorandum of Understanding to potentially invest in the Ruataniwha Water Storage Scheme in Hawke's Bay.
The dam itself will cost $360 million, with farmers expected to invest another $240 million on farm infrastructure.
The Hawke's Bay Regional Investment Company, which is owned by the Hawke's Bay Regional Council, is the lead company that will invest in the dam, which would make up to 30,000 hectares of land available for intensive agriculture.
A Board of Inquiry is considering submissions.
Chief executive of Ngai Tahu's commercial arm Mike Sang is welcoming the board's involvement, saying it should provide tangata whenua and the community with assurance about the water scheme.
HBRIC managing director Andrew Newman says an investor committee will be formed with Ngai Tahu Holdings and TrustPower to consider the design and construction contracts for the scheme.
The committee will consider a range of matters such as design and construction.
Mr Newman says in addition to their capital, the two companies bring a lot of financial expertise to the proposed project.
He says it is another milestone for the scheme and he is optimistic they can get something viable by the end of April 2014.
Mr Newman says the right place for any debate about the proposed dam is through the Board of Inquiry.