Full resource consent was approved for its sustainable centre initiative, paving way for construction to begin, Datagrid New Zealand announced in a press release.
The facility would be New Zealand's first AI factory.
The landing of the Tasman Ring Network at Oreti Beach has also been fully approved, which would be the first international subsea cable connection to the South Island.
The cable would enhance global connectivity and support New Zealand's growing digital economy, Datagrid New Zealand said.
The factory would include the construction of a 78,000sq m AI factory in Makarewa, just north of Invercargill, equipped with a Grid Exit Point substation.
The construction phase was expected to create over 1200 skilled and technical jobs. Once operational, it would consume 280MW of power, making it New Zealand's second-largest electricity user after the Tiwai Point aluminium smelter.
Datagrid New Zealand said New Zealand's political stability, abundant renewable energy resources and strategic geographic position were key factors in positioning the country to become a secure and trusted global data hub.
The natural cooling conditions in Southland offered energy-efficient advantages, it added, saying Invercargill was poised to emerge as a vital digital destination in the coming years.
"We extend our sincere gratitude - ngā mihi nui - to the iwi, landowners, local councils, and the Southland community for their unwavering support throughout this process," Datagrid New Zealand founder and chief executive Remi Galasso said.
"This approval is the result of years of dedication and collaboration, and we are excited about the transformative impact this project will have on Southland and New Zealand as a whole."
Consent for the project was approved by the Southland District Council, Environment Southland and Invercargill City Council.
- Allied Media
