Regional economic development Minister Shane Jones has announced during the weekend the project will receive $19.5million from the Government's provincial growth fund.
The funding followed an initial Provincial Growth Fund investment of $995,000 in December towards a business case, feasibility study, concept designs and procurement strategies.
Mr O'Donnell said the investment, in the form of a loan, would go towards the $160million project, which he defines a ``game-changer'' for the whole region.
The project comprises the demolition of an entire block to rebuild a retail precinct with more than 40 businesses, a medical centre, office spaces and a food outlet inspired by the "Little High'' in Christchurch.
"We believe that the size of a city doesn't have to denote its vitality and our project aims to give Invercargill its heart back.
"The announcement is proof of Minister Jones' and the Government's belief in both the redevelopment and our great city.''
Now, with the Government's boost, Mr O'Donnell is waiting for the confirmation of all funders to go ahead with the next step of the project, the demolition.
The Richardson Group, businessman Geoff Thomson and the Invercargill City Council have agreed to invest up to $25million each.
Community Trust South was expected to announce its decision on funding this week, he said.
"We are excited to see the pieces of the funding puzzle starting to come together and are on track to have all funding confirmed by the end of August.''
Demolition was expected to start by the end of the year, Mr O'Donnell said.
During this period, he expected to minimise the inconvenience of the work with events and activities on site.
The construction of the first part of the project would be completed by 2021.
He wanted to have the anchor retailer open by November 2021, for the Christmas season.
Mr O'Donnell confirmed Farmers would be the anchor retailer and the company would move from its Dee St building to the CBD block.
He said the challenge now for the city was find a ``good use'' for the building.
