Prime Minister John Key announced the extra money, as well as the establishment of a new high performance institute within its sport funding body, Sport & Recreation New Zealand (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 claimed that the country will reap the benefits at the 2016 Olympics.

Barry Maister - the secretary general of the New Zealand Olympic Committee (NZOC) and new member of the International Olympic Committee - says the funding is very welcome.

"You're talking about $20 million (£9.5 million) a year for as long as imaginable - initially mainly in infrastructure, moving more into support," he said.

"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 $15 million (£7 million) towards the $40 million (£19 million) 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.

A cycling centre of excellence, which will include a new velodrome in the North Island is also in the pipeline.

Canoe Racing New Zealand will move its high performance base to Lake Karapiro, where it will share facilities with rowing.

The cash injection will boost annual funding to $62 million (£29.4 million) a year by 2013, compared to the current allocation of $42 million (£20 million) annually.

McCully said while there was still a lot of money to find, it was important to get the thinking straight and the roadmap in place.

"It is still a work in progress, but Government funds are committed and discussions with partners are well advanced."

Maister hopes that the money will help New Zealand close the gap on some of its rivals.

"We have been behind," he said.

"Sports infrastructure in New Zealand was really in danger of becoming a sad case.

"We've had ... no substantive Government investment in sports infrastructure for as long as I can recall.

"We were in danger of slipping off track."

Millennium Institute chief executive Mike Stanley said the Government's investment was unprecedented.

The institute, already home to the country's largest high-performance community, has outgrown its current digs and has long recognised the need for expansion.