The Overseas Investment Office (OIO) has ordered the owners of an historic South Waikato hotel to sell the complex after they failed to redevelop it as promised.
The Okoroire Hot Springs Hotel, near Tirau was purchased in 2014 by the Chinese-owned Kingstown Blue Spring Resort.
The hotel is one of the country's oldest, opening in 1889.
The new owners had agreed to construct eight new hot pools and 22 new guest rooms while protecting the important heritage features and improving public access to the property.
Kingstown Blue Spring Resort also intended to make it more attractive for visitors and tourists.
The OIO said this was one of the main reasons why the application was approved.
The company needed consent to purchase the property because of its size and location of the land, and its historic value.
The OIO said while Kingstown Blue undertook some minor work, the office became concerned about the company's ability to complete developments in time and comply with consent conditions.
It has ordered the company to dispose of the hotel.
The OIO said it will act against overseas investors that don't follow the rules.