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Councillors at this week's annual plan deliberations voted 13-1 to approve the annual funding, which was to be matched dollar-for-dollar by Ngai Tahu.
The money would help cover the costs associated with a variety of cultural and advisory roles already carried out - free of charge - by Aukaha and local iwi in Dunedin, councillors were told.
That included the costs of seeking their input on a variety of projects, like planning for the central city upgrade, infrastructure projects or resource consent applications, which the council was legally required to do.
The work involved was not resourced by the council, meaning Ngai Tahu bore the cost, and even powhiri and waiata groups at Dunedin Airport and elsewhere were provided free, costing local iwi, Mr Cull said.
Council chief executive Sue Bidrose said the funding was part of the city's obligation as a treaty partner, while Cr David-Benson Pope said it was long overdue.
"Thank goodness we are doing it now."
Cr Lee Vandervis was the only councillor to vote against the funding, questioning its value for ratepayers.
The funding was among a list of additions to the 2019-20 budget approved by councillors this week.
That also included $525,000 for climate change planning, a $200,000 boost for the council's annual city marketing budget and $150,000 for work on a central city bus loop and subsidised fares.
Otago Museum ($70,000) was also a recipient, as was Araiteuru Marae ($5000) and the Dunedin Shanghai Association ($3500), while a DCC travel management initiative was allocated $18,000.