However, the council wants some or all of that money back if the event runs at a profit after setting aside funds for next year's event.
At the council meeting on Tuesday, it voted to make available the necessary funding to stage the event and appointed Cr Mike Balchin as liaison with the organising committee.
The money will cover organising the event, providing items such as portable toilets, signage, street banners, posters, spectator information, programmes, traffic management and the necessary resource consents and licensing.
Three events are planned for the weekend, with a 4km hill climb to the Whitehorse on the Hunter Hills on the Saturday and a 5.6km rally sprint followed by a sealed street sprint on the main street from "pub to pub" on the Saturday.
The Waimate 50 was a popular event on the motorsport calendar from 1959 to 1966, and raced on a circuit around the town's streets.
It then transferred to the Levels Raceway, in Timaru.
In 1991, it was resurrected around the streets of Waimate and continued every second year until 1999, when changes in racing rules saw costs rise and it ended.
Since then, various attempts have been made to resurrect the street race, but have been thwarted by the cost of meeting modern safety rules.
The 1991 event drew a crowd of 15,000 to the town.
Council support services manager Carolyn Johns said the event could bring a substantial number of people and money into Waimate over Labour Weekend and recommended the council carefully consider the "one of request" for financial assistance.
