The collaboration between the Otago Polytechnic, University of Otago and the Dunedin City Council was an example for the rest of the country to follow, polytechnic chief executive Phil Ker said yesterday.
Speaking after Prime Minister Helen Clark announced a $12.5 million suspensory loan for the polytechnic to help fund the Otago Institute of Design, Mr Ker said it was a great day for the city's tertiary institutions.
"It is an accumulation of several years of careful planning and our belief that design can make a difference not only to Dunedin, but the country as a whole as we look to new world markets for New Zealand products."
The government funding ensured a $20 million project for the establishment of a new design building would proceed.
University vice-chancellor David Skegg said the case for collaboration was compelling.
"It allows us to use scarce resources wisely. It also gives our students and staff a better opportunity to connect with industry at both the applied and research levels."
As reported on Saturday in the Otago Daily Times, the university is proposing to buy the Wickliffe Press site - on the block bordered by Clyde, Albany and Forth Sts.
The design institute will occupy about 25% of the area.
The Otago Institute of Design building was expected to house about 800 students, more than 100 design and design research staff from both the polytechnic and university along with product development facilities that would be available for all industries locally, nationally and internationally.
The university was expecting to contribute financially to the building itself, the equivalent to the cost of the space which would be occupied by the department of design studies.
While the university and polytechnic departments would continue to operate separately, they would share workshop areas, classrooms and some equipment.
Mr Ker said it was hoped building would start within two years.
Dunedin deputy mayor Syd Brown said the council would today announce its tertiary land use plan which covered how to look after its land bank for the next 20 to 25 years.
