The film will be produced at the eastern suburbs' Fox Studios, which have been rebadged as Disney Studios Australia.
Federal Arts Minister Tony Burke announced 20th Century Studios' Kingdom of the Planet of the Apes will receive $17 million in support from the Australian government, as well as funding through Screen NSW's Made In NSW fund.
Directed by Wes Ball, the film is the latest chapter in the Planet of the Apes saga - picking up after the conclusion of 2017's War for the Planet of the Apes.
The production will create more than 400 local jobs, inject more than $128 million into the Australian economy and use the services of more than 1000 local businesses.
Mr Burke said the funding was part of the government's commitment to supporting Australian screen workers.
"This production will support jobs and give our leading digital and visual effects workers the opportunity to showcase their talents to global audiences," he said on Monday.
"Having a small part of the Disney universe right here in Australia is a significant boost to our local industry," he said.
Meanwhile, NSW Arts Minister Ben Franklin said a production of Wicked will open in August at Sydney's Lyric Theatre, generating millions of dollars in visitor expenditure and supporting arts and hospitality jobs.
"Wicked is a global sensation that has played to more than 60 million people in 16 countries, which will draw tens of thousands of musical lovers to the Harbour City and will coincide with its 20th anniversary on Broadway," he said.
14°C