Southland is set to receive almost $2 million from the Government with around half going towards an inner city development project in Invercargill.

The $1.9 million boost comes from the Provincial Growth Fund (PGF) overseen by New Zealand First MP and Regional Economic Development Minister Shane Jones.

Parliamentary Under-Secretary for Regional Economic Development Fletcher Tabuteau made the announcement on Wednesday, saying Southland will receive a boost to its economy through the package.

"These announcements demonstrate the PGF's focus on projects with potential to spark economic growth and create jobs in the Southland region," he said.

The PGF funding will go towards:

$995,000 for Invercargill inner-city development

$424,900 for a Southland salmon and mussel hatchery and nursery

$490,000 for sheep and goat industry resources

The almost $1 million boost to Invercargill is part of the Inner-City Development project - a redevelopment of the city to "bring life and vitality to the CBD".

The funding will support stage two of the project, says Mr Tabuteau, "ensuring it is robust enough to attract future investment, and deliver infrastructure that is resilient and sustainable".

When stage two is complete - which will include concept designs and a business case - the project will begin to take shape with more restaurants, offices and entertainment venues planned to be built.

This, it's hoped, will increase Invercargill's population of around 54,800.