The Fale Malae project is to receive $NZ10-million ($US6.1-million) from government.
The project is a partnership between Wellington's Pacific community, City Council, Victoria University and central government.
Cabinet Minister Carmel Sepuloni said it's a commitment to establishing a dedicated site to promote and share New Zealand's Pacific heritage.
Detailed planning and development can now begin.
Fale Malae trustee Luamanuavao Dame Winnie Laban said it's a powerful symbol of New Zealand's connection to the Pacific region.
Luamanuvao said the idea began in the 1950's with Wellington's first Pacific migrants.
"From there, we've always wanted a place that's not a particular church but a place that could bring the Pacific community together. And a place where New Zealand could celebrate its Pacific identity," she said.
The Victoria University Assistant Vice-Chancellor (Pasifika) and former Minister of Pacific Peoples said the proposed site in Wellington's CBD offers a connection to important strands of the capital city.
"It's in the parliamentary precinct but it's also very much part of the vibrancy and life of the city in relation to Wellington being the home of government and government agencies. But also parliament, the High Commissions, artists, business."
"I think the Fale actually brings all those strands together," Luamanuvao said.
According to the trust chair, Adrian Orr, the Fale will be "a place of belonging for all New Zealanders" while recognising the diversity Pasifika communities.
"And better connect and support them with tertiary education and civic engagement," he said.
Many people have worked on the project over many years, said Dame Winnie, in a partnership which shows confidence in the future of Pacific peoples.
"The Fale symbolises New Zealanders as being (also) peoples of the Pacific and that this is our home," she said.