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The council resolved to transfer the administration of the fund to Active Southland at a meeting of the performance, policy and partnerships committee in July.
It formally passed the administration last week.
The scheme had been administered by the council since 2002 when the fund was relinquished by Sport New Zealand (then Sparc).
The fund, initially established by the Hillary Commission, encourages people to get involved in sport, fitness, physical recreation and play.
ICC manager strategy and policy Rhiannon Suter said it was a more natural fit to have Active Southland, previously known as Sport Southland, looking after the fund and awarding it to the right projects and groups.
‘‘It makes more sense for a community body that is immersed in the kaupapa of sport and recreation to be administering the fund,’’ she said.
Active Southland would be able to review the use of the fund within its wider strategy, operate it in line with the other funds it administers and ensure that the widest possible range of organisations were aware of the fund and able to benefit from it, she said.
‘‘There are a number of funding sources, including community funding and the Tu Manawa Active Aotearoa fund which Active Southland administers, and so this is an opportunity to have a look at how these funds align to ensure the needs of the community are being met.’’
Information about the next funding round for the Invercargill Active Communities scheme would be made available in March, Mr McDermott said.
Invercargill Active Communities provides funding in the form of a grant or loan for sport, fitness and active leisure activities.
Priority is given to activities that train volunteers and increase participation in activities.