The Lakes District Health Board said the unit had been a point of concern for several years and submitted a $30.7 million business case to fix it.
In September last year then Health Minister Chris Hipkins announced $25 million in Government funding to rebuild Whare Whakaue, with the Lakes District Health Board to cover the remaining $6m.
At the funding grant announcement, Hipkins called the existing facility "simply not good enough", "dark", "depressing", and "not culturally appropriate for any culture".
More than one year on, a design for the building was still being developed.
"There have been delays to the project due to Covid-19 lockdowns," a Lakes District Health Board spokesperson said.
"The nature of the Rotorua geo-thermal environment has meant additional geotechnical testing and working with engineers to find solutions to technical issues, for example, very high ground temperatures."
The spokesperson said ongoing delays and rising construction costs meant an increase in the cost of the project was "inevitable."
The spokesperson said cost increases in the building industry over the past year had been used to project the budget impact of the delay.
The board did not want to disclose any figures, saying they would be "estimates only."
Health Minister Andrew Little said he was aware that the board had signalled the need for additional funding.
"That request is currently being considered by officials. I'm advised that cost escalation isn't unexpected, given the current global climate and challenges in securing materials."
Little said a representative of the Ministry of Health would be appointed to join the governance of the project.
"This project remains a high priority, both for the District Health Board, and for our mental health infrastructure programme."
The Government's 2019 budget includes a $1.9 billion mental health package, with $200m allocated to new and existing mental health and addiction facilities.
Naera said the delays were understandable given Covid-19 and its impact on the construction industry.
"There's uncertainty at the moment because we've got Covid and we've got the reforms that are occurring [in the health sector]."
Naera was the project leader for Kia Piki te Ora, the Ministry of Health's national Māori suicide prevention programme at Te Runanga o Ngāti Pikiao Trust and spent 10 years in service to the programme.
Naera said the existing facilities at Whare Whakaue were "not helpful."
"With the delay it's probably going to be another year or two for the development to be complete.
"I think the delay is going to have a huge impact on whānau, but when it does get done I know the elation and satisfaction of having a purpose-built facility is going to be extremely important for the Lakes community in general, for their whole wellbeing and recovery and for our frontline staff."
Naera said he applauded the board's work over the past five years to improve mental health services.
WHERE TO GET HELP • Lifeline: 0800 543 354 (available 24/7) • Suicide Crisis Helpline: 0508 828 865 (0508 TAUTOKO) (available 24/7) • Youth services: (06) 3555 906 • Youthline: 0800 376 633 • Kidsline: 0800 543 754 (available 24/7) • Whatsup: 0800 942 8787 (1pm to 11pm) • Depression helpline: 0800 111 757 (available 24/7) • Rainbow Youth: (09) 376 4155 • Helpline: 1737 If it is an emergency and you feel like you or someone else is at risk, call 111