Tomorrow, the council will consider including the expenditure in its 2011-12 draft annual plan, which will then be open for public comment.
The aim is to speed up development of the harbour area for commercial, recreational and leisure use, linking it to Oamaru's already renowned historic precinct.
Several strategic plans for developing the harbour have been prepared in the past, but work has progressed slowly.
A new Oamaru Harbour development strategy, incorporating recommendations from previous plans, is being prepared by the district council's harbour sub-committee.
The budget going to the council tomorrow aims to do virtually all of the work from financial sources other than ratepayers, except for a request for $10,600 from rates.
Proposed non-ratepayer sources are a $620,000 loan, $140,530 from the harbour endowment fund, $505,500 from the Resource Management Act contributions fund and another $130,000 from grants.
Corporate services group manager Carolyn Carter said the funding would give the sub-committee a reasonable mix of projects for the next financial year.
Some would be done as quickly as was practical to meet expectations of Rugby World Cup tourists.
The projects also included some capital maintenance to meet the needs of commercial and leisure users.
Maintenance work listed included upgrading Holmes Wharf, upgrading the breakwater, and work on roads and slipways.
The bulk of the budget, $780,000, will be spent on the harbour precinct, including developing Friendly Bay, street furniture, landscaping and a Steampunk-themed children's playground.
