The government has announced agreement in principle with the Auckland Council and Emirates Team New Zealand.
Taxpayers will contribute $114 million - including a hosting fee of $40m - while the council will stump up $98.5m.
Economic Development Minister David Parker said the government was confident the event would deliver economic benefits.
"There'll be different views on that in society, some people see this as primarily subsidising a sport of the elite, the government's analysis is at that number it is justifiable because of the economic benefits to New Zealand."
Auckland Mayor Phil Goff said the base configuration requires much less intrusion into the harbour at Hobson Wharf compared to previous options.
The competing teams' bases will be spread across three wharves.