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The NZ Transport Agency has signalled it is not yet financially committed to building it, even though it has been working on a concept plan with the developer of adjacent land, Mt Iron Junction Ltd.
The five-way roundabout would be at the intersection of State Highways 6 and 84, and Riverbank Rd.
It is allowed for in the company's application to the Queenstown Lakes District Council for resource consent for its $20million to $30million development.
Agency principal planner Richard Shaw submitted the agency was "neutral'' on the development.
While the agency "would support'' a roundabout, improvements to the intersection would be considered as part of its Wanaka to Luggate "safer corridor project''.
"However, the project is not yet prioritised for transport agency funding and consequently, there is no certainty when it could be constructed.''
Mt Iron Junction's application said building the roundabout would be the agency's responsibility, and while the agency recognised the intersection would function better as a roundabout, it was not a priority for a major upgrade.
The company proposed the roundabout would be operational before it began its development.
Its application to build worker accommodation, a motel, a commercial precinct, a child-care centre, a mini golf facility and a service station attracted 25 submissions in support and six in opposition.
Wanaka Chamber of Commerce chairwoman Bridget Legnavsky submitted in favour saying the "number one problem'' for Upper Clutha businesses was the difficulty in obtaining and retaining staff because of the high cost of living, and "in particular the high cost of housing''.
Tourism Wanaka general manager James Helmore supported the development if it produced "affordable and accessible'' worker accommodation, and also if it improved safety at the intersection.
Neighbours Philip Penney and Christine Jacques opposed the development, saying it would "completely decimate'' the existing rural amenity.
"The gateway into Wanaka will change from a semi-rural outlook at the foot of the distinctive and spectacular Mt Iron to one dominated by an intensive commercial and residential development.''
Willowridge Developments Ltd, which is behind the nearby Three Parks subdivision, opposed the development for a similar reason.
It also pointed out there was "sufficient'' commercial zoned land elsewhere in Wanaka.
Albert Town Community Association chairman Jim Cowie said the association unanimously voted to support the proposal, subject to more detail being provided.
"The current junction set up is intolerable and dangerous, so its replacement has to be very carefully planned.''