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"Dunedin has a strong set of services and is a well-connected city where a number of government agencies have a presence," Immigration New Zealand general manager Steve McGill said today.
"There are good employment opportunities in the area, suitable housing is available and there is excellent support from the community."
Mr McGill said in a statement an extra settlement location was needed after the Government's decision to welcome 750 Syrian refugees over the next two and a half years in response to the ongoing conflict in Syria.
Dunedin was considered alongside New Plymouth, Hastings/Napier, Invercargill and Tauranga.
In making the decision, factors such as employment, housing and the availability of Government services available alongside community support were considered, he said.
In September, Dunedin Mayor Dave Cull called for a refugee centre in the city, and last month a new grouping of social agencies, the Dunedin Refugee Steering Group, told the council it wanted the city to be considered as a centre for refugee resettlement.
At present, all refugees arriving in New Zealand go first to the Mangere Refugee Resettlement Centre for a six to eight-week stay, before being sent to one of four other centres in Waikato, Wellington, Manawatu and Nelson.