Contiki Holidays operations manager Murray Scott confirmed the tour company would include Dunedin as part of its South Island and New Zealand tours from October.
The size of the tours meant they could no longer be accommodated on recently refurbished vessels at Milford Sound, so Dunedin was chosen over other South Island destinations, including Te Anau, Wanaka, Hanmer Springs and Nelson.
"Dunedin was the best for us as a touring destination," Mr Scott, of Auckland, said.
The city was last part of a Contiki tour six years ago, and he was confident the latest itinerary would be a success.
Following research last year, Contiki, which caters for 18- to 35-year-olds, has included the Speight's Brewery Tour, Cadbury World and Baldwin St as part of its Dunedin stopover.
Tour groups would also have the option of a meal at Speight's Ale House and the Deathrattle Haunted Graveyard Tour before they returned to their inner-city hotel, Living Space, he said.
During the peak summer season, up to four buses containing about 50 passengers each would arrive in the city every week, with 5000 Contiki travellers forecast to visit Dunedin each year.
The majority of customers were Australian (65%), followed by North Americans (15%) and British and Europeans (15%), and "they pay a bit more and expect a bit more".
Speight's Brewery Tours manager Chris Snow said the news was "huge for us".
Last year, just under 30,000 people took a brewery tour, so an extra 5000 customers was a "significant increase".
The confirmation Contiki was returning to Dunedin, coupled with the Rugby World Cup and increasing cruise-ship visits, meant the outlook was positive after a difficult two years.
"It is great to have Contiki back and being able to showcase the Speight's brand to international visitors," he said.
Tourism Dunedin chief executive Hamish Saxton said the decision to include Dunedin was "absolutely brilliant news".
Individuals and tour companies would watch Contiki's move with interest, as the company was a trendsetter in the influential youth market.
