Construction has begun on the first stage of the controversial Central Plains Water irrigation scheme in Canterbury.
The $375 million scheme will be built in three stages. It will take water from both the Rakaia and Waimakariri rivers and irrigate land between the two.
The Prime Minister, John Key, turned the first sod on the scheme on Tuesday, and its backers say could create up to $1.4 billion in economic activity.
It should eventually irrigate about 60,000 hectares in an area bounded by the Rakaia and Waimakariri Rivers, the foothills and State Highway 1.
The Primary Industries Minister, Nathan Guy, says it's expected to boost exports by $300 million a year, and create about 1100 new, fulltime equivalent jobs.
He says the construction phases alone will create a further 800 jobs and $700 million worth of economic activity.