A National War Memorial Park, costing up to $87 million, will be built across State Highway 1 in Wellington in time for Anzac Day in 2015, the government has announced.

The $12m park will link together the Tomb of the Unknown Warrior, the National War Memorial, the Hall of Memories and the National Carillion, just north of the Basin Reserve, it was confirmed on Tuesday.

State Highway 1 runs through the planned park area, and the New Zealand Transport Agency will spend up to $75m sending the road, Buckle Street, underground.

Arts, Culture and Heritage Minister Christopher Finlayson says the park will 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. This shows the importance New Zealanders attach to our military history, and the reverence we continue to have for such occasions."

Transport Minister Gerry Brownlee says a tunnel under the park is the only sensible option for a very important site.

The road going underground would unite the precinct; increase the accessibility of the National War Memorial, and limit the effects of traffic on visitors as they contemplate history, he said.

"This is a first, best option, not any kind of compromise solution for such an important project."

The Wellington City Council will contribute $2.11m towards the park while the government will fund the balance, and pick up the bill for the cut-and-cover project of SH1, estimated to cost $70-75m. Work will start early next year.

The Australian government has contributed AU$5($NZ6.4)m for an Australian memorial, which will stand opposite the National War Memorial.

Wellington Mayor Celia Wade-Brown welcomed the park development.