UPDATED 6.29pm: SkyCity and the government have agreed on a smaller design for Auckland's new convention centre.

The government has won the stand-off over extra funding, and SkyCity will kick in an extra $28 million over the $402 million it initially agreed to.

Convention centre design director Andrew Barclay says the central location of the building is vital.

"These buildings are typified by generally being on the outskirts of cities, and this has been endeavoured to bring a very large building, a very significant building, into the core of the city."

Economic Minister Steven Joyce says a lack of taxpayer dollars in the Sky City convention centre doesn't mean a loss of control for the government.

Joyce says it is about "give and take".

"It just shifts the balance slightly. They've got a responsibility to put their hands up and get on with it.

"And it will shorten the process, so from our perspective there's no real loss of control in that context."

SkyCity expects that will eventually balloon further to around $470 million.

Newstalk ZB reporter Alicia Burrow reveals the adjourning hotel site has been moved from Wellesley Street to Hobson Street, and now includes a 300-bed, five star hotel.

"The construction will be completed with no further cost to the Crown, but the Crown will not have the ability to make any further adjustments to the design."

A newly created laneway will be built, to be lined with shops, cafes and bars.

Subject to resource consent from Auckland Council, SkyCity hopes to sign a building contract and start construction by the end of this year.