Completion of the project will mean that Otago has the only deep-sea port in New Zealand's South Island.
Port Otago currently operates the Port Chalmers and Dunedin facilities within Otago Harbour.
Officials say that project development must include the deepening and widening of Otago Harbour along with upgrading of the port's current wharves, berths and container terminal.
Stakeholders told local press that the “tens of millions” to be spent would be “a shot in the arm” for the region.
According to initial plans, containerships up to 50% bigger than the largest ships that call now and able to load 6000 twenty-foot equivalent units (TEUs) could be calling as early as 2010.
“It is essential for Dunedin, and the lower half of the South Island, that Port Otago remains a strong and significant part of New Zealand's international trading supply chain,” said Otago port chief executive officer Geoff Plunket.
“To make sure that happens, Port Chalmers must be able to handle the largest ships that come to New Zealand,” Plunket said.
According to Plunket robust increases in the export of dairy and other primary resources from the Otago region is driving the deep-sea port project forward.
Port Otago had to look forward or risk becoming a coastal feeder to other New Zealand ports, he said.
Such a scenario would severely disadvantage the local economy, he added.
Reports say that a project team of local and national specialists is currently undertaking a six month feasibilty study.