Nova Scotia announced Tuesday it will invest nearly $9 million into getting the Shelburne Ship Repair yard up and running again.

The NDP government of Darrell Dexter said it will lend Irving Shipbuilding Inc. the money necessary to upgrade the shipyard about 200 kilometres southwest of Halifax. Eighty per cent of the loan is forgivable.

The money will be used to modernize the yard's marine railway and wharf, which date from the Second World War. The Shelburne yard is owned by the province and leased to Irving.

Irving Shipbuilding president Steven Durrell said the upgrades will make it easier for the company to compete for repair contracts on larger vessels. The yard could not operate without the subsidy, he said.

Up to 45 people will work on the modernization project. Once it is complete, it's expected the yard will employ 70 people.

It was welcome news for Gary Nickerson, the local union president.

"Oh, that means a good Christmas gift, actually," he said. "It means that now going bigger means more work probably in the future for us. It's still probably going to be seasonal work for us, but probably be able to employ more people, more people with trades. It just means all good for us right now."

The Shelburne yard was shut down in mid-August because major upgrades were needed before work there could continue.

Irving had estimated it would cost between $8 million and $13 million to fix the yard.