Auckland International Airport is buying a 25% stake in Queenstown Airport for $27.7 million.
Auckland Airport will pay cash for its stake, buying four million new shares issued in the South Island airport.
The airports are planning a five-year strategic alliance to boost passenger numbers through both centres, by advertising together and encouraging airlines to make more flights to Queenstown.
They expect the alliance will boost passenger numbers and pump more than $150 million into Queenstown's economy.
Auckland Airport says it is keen to increase its stake to between 30% and 35% by the middle of next year, subject to approval by Queenstown Airport's majority owner, the Queenstown Lakes District Council.
Auckland Airport chief executive Simon Moutter says Queenstown Airport's strong growth prospects fit in well with its own strategy. In January, the company bought a 25% stake in a company that runs two North Queensland airports.
Auckland Airport is hoping for 50,000 more passengers through its doors as a result of the deal, while Queenstown is hoping an extra 200,000 passengers will pass through its airport by 2015.
The chief executive of the regional tourism organisation Destination Queenstown, Tony Everitt, says it will push the resort town closer to its goal of contributing $1 billion to New Zealand's GDP by 2015.
Queenstown mayor Clive Geddes says it will give a big boost to the district.
