Plans for a combined conference centre and movie museum in Wellington have been scrapped.

Photo: Supplied

The Wellington City Council and The Movie Musuem Limited (TMML), a company set up by Sir Peter Jackson, Fran Walsh, Sir Richard Taylor, and Tania Rodger, announced yesterday they would part ways.

The plan to build a movie museum and convention centre on Cable St, opposite Te Papa, was first announced in 2015. At that time, it was expected to cost $134 million, but in this year's long term plan $165.5m was put aside for the project.

In a statement, mayor Justin Lester said the decision not to forge ahead with the plan was mutual and came after a series of meetings and correspondence between the two organisations.

The two sides had given the idea of a joint project the best possible shot but it had become clear the best option would be to build a movie museum and convention centre as separate entities.

Photo: AFP / Getty

TMML said despite the best efforts of everyone, the economics of the Cable St location proved to be a challenge for the movie museum.

"We remain committed to the creation of a movie museum in Wellington, and will now be considering other options," the company's statement said.

The city would still get a convention centre, with the council planning to start construction next year.

Mr Lester said instead of a movie museum the centre will have a 1500 m/sq exhibition space which will house large internationally significant exhibitions, and draw in visitors from across the country and overseas.

The council is in talks with Te Papa museum about a partnership for the operation of the exhibition space.

The council expected to lodge a resource consent for the convention centre and exhibition space within the coming months.