The big budget Lord of the Rings prequel, The Hobbit: An Unexpected Journey, was shot in the country and will receive its world premiere in Wellington next month (Nov12).
City officials are putting on a number of special events to mark the big occasion, including a parade, a 500-metre (1,600-foot) red carpet and big screens set up across the town to allow fans to watch the premiere, as well as free screenings of the Lord of the Rings trilogy.
The city will also be named The Middle of Middle-Earth, while Wellington International Airport will also adopt the tag and immigration officials are considering using a special Hobbit-themed passport stamp for visitors.
The events will cost the city around $89,626 (£56,016) and Mayor Celia Wade-Brown has been forced to defend the use of taxpayers' money.
She tells Radio Australia, "I think its really important to have not just a great event on the day, but also there is going to be more than 100 different international media outlets in Wellington that day, and we want to tell the Wellington story of talent and technology.
"We consulted on spending the money on The Hobbit premiere through our budget consultation, which we do every year, and the money is from the commercial sector and they're very supportive of the council doing a great job."
The premiere will take place on 28 November (12).