Work on trenching Buckle St to make way for a national war memorial park is to begin in October.
More than $80 million will be spent on the National War Memorial Park with part of Buckle St being moved underground to make way for it.
Prime Minister John Key announced the Government would fund a National War Memorial Park to link together the elements of the national memorial precinct, which consists of the Tomb of the Unknown Warrior, the National War Memorial, the Hall of Memories and the National Carillion.
The precinct is divided by State Highway 1, and would be brought together by trenching Buckle St, between Tory and Taranaki Streets.
The Government's initial estimate for the park and tunnel is $82 million to $87m.
Wellington City Council is to contribute $2.11 million towards the park. The Australian Government will contribute A$5 million for an Australian memorial.
The tunnel and park will be completed by April 2015, in time for the 100th anniversary of the Gallipoli landings.
NZ Transport Agency will oversee the construction of the tunnel.
Arts, Culture and Heritage Minister Christopher Finlayson said the park would provide a space for people to congregate on major occasions.
'The number of people attending Anzac Day celebrations is increasing and immediate space around the War Memorial is more often than not at full capacity," he said.
However, Wellington City Councillor Iona Pannett said spending more than $80m on a park in tight fiscal times was not smart.
"There are always massive increases in the cost of these things," she said. "For example, the flyover went into the regional land transport strategy at $27 million, it will go over $100 million.
"My question is 'can we afford this'? Are there lower cost alternatives?"
- The Wellingtonian