The Government has committed to providing the University of Canterbury with financial aid.
Last night, Tertiary Education Minister Steven Joyce told The Press taxpayer funding would be made available to help the ailing institution.
Announcing a $67 million annual deficit this week, University of Canterbury vice-chancellor Rod Carr described the need for help as "critical".
He said the Government had to make the money available by October.
"Certainly that would be our intention. Rod's working to a timeline and we're working to a timeline. It is our intention to provide it by October," Joyce said last night.
The Tertiary Education Union organiser for the university, Gabrielle Moore, yesterday said there was only so much the university could do and it was time for the Government to step in.
University staff agreed to have their pay frozen this year.
Despite the university asking for help in October last year, Joyce said the Government was not holding up funding.
"It's really just getting a clearer picture of what they need. It comes down to two things: how they are tracking financially, and the operational side ... and the buildings that have been damaged and what proportion will be covered by insurance."
The Government is waiting on more information from the university.
Previously the minister said the university had to get its house in order before the Government would commit to help. Joyce now believes it has done so.
"Their financial situation is better than expected but that doesn't change the fact that we've made this commitment."
Canterbury's deficit can be broken into three sums. Forty million dollars is attributed to earthquake recovery.
The other $20m was a one-off adjustment to the depreciation of library materials.
Also bumping up the total was increased expenditure of $4.5m to attract students and a $3m increase in insurance premiums.
Ignoring the earthquake repairs and library adjustment, the result would have been a deficit of $6.6m.
Lincoln University is also expecting to post a deficit this year.
Group manager for corporate services Murray Dickson said the university was not in a position to release the final figures for 2012 because of the year-ending audit.
"However, in short we will be posting a deficit for 2012," Dickson said.
The Press understands that figure is likely to be between $5m and $6m.
Like Canterbury, Lincoln has also been hit by earthquake repairs.
"As with everyone the full effects on buildings are becoming more apparent as further inspections and reports are carried out and we are still in the thick of it," Dickson said.