Plans for the clean-up have been worked on for several years.
Making the announcement today, Helen Clark said: "The Rotorua lakes are a dramatic example of the problem we face - all are either degraded or at risk environmentally."
"Already several of the lakes suffer from algal blooms which restrict their recreational use."
Rotorua's lakes were vital to tourism, she said.
Each of the four lakes had different clean-up plans. Key components were:
* Construction or extension of sewerage works to pick up waste from un-sewered lakeside communities around lakes Rotorua, Rotoiti and Okareka;
* treatment or diversion of nutrient-rich streams flowing into Lakes Rotorua and Rotoehu;
* capping lake sediments to lock up nutrients coming up from the beds of Lakes Rotorua and Rotoiti;
* construction of wetlands, and land management changes to reduce the nutrients coming in from surrounding land;
* harvesting and disposal of weeds from Lake Rotoehu.
Much of the government funding would go towards sewerage work.
The lakes have been degraded over the years through sewage, farming and other land use.
The government funding would be progressively paid out.
Other lakes are also at risk. The clean up and restoration programme for the 12 lakes is being undertaken by the Rotorua Lakes Strategy Group (mandated by the Te Arawa Lakes Settlement, this group comprises representatives from Te Arawa Lakes Trust, Rotorua District Council and Environment Bay of Plenty).
Environment Minister Trevor Mallard said the Government was treating water quality and water management as a priority. A report on the state of New Zealand's environment earlier this year highlighted water quality as a concern.
"Looking after New Zealand's water bodies, lakes and rivers is a top priority for the Labour-led Government," he said.
"That is what the Sustainable Water Programme of Action is all about. This latest government support for Rotorua follows previous government help since 2003, including evaluation work on the scope of the Rotorua lakes' problem, short term remedial work, community waste water upgrades, land user initiatives, and science and research."
Rotorua MP and Conservation Minister Steve Chadwick welcomed the announcement as a huge boost for the region.
However, the Green Party said $72 million was a fraction of the money needed to reverse the effects of agricultural and urban pollution on lakes and rivers.
"It's like mopping the floor while the bath is still overflowing," environment spokesman Nandor Tanczos said.
"It seems futile to clean up the toxic legacy we inherited in Rotorua without doing something about the toxic legacy we ourselves are leaving all over the country."
Mr Tanczos said one of Labour's 2005 election promises had been to clean up all the rivers.
"The health of our waterways is about more than just cleaning up tourist sites," he said.
Farmers could be involved in efforts to reduce the leaching of nitrogen from their properties.
Almost a year ago, the Government committed to giving long-term help to clean up Rotorua's lakes on a case-by-case basis.
- NZPA
