Councillors have voted to spend £500,000 on Rhyl's Foryd Harbour project after a confidential report revealed costs had risen by £700,000.
The decision was taken by Denbighshire council to secure the project's future.
When the council agreed to progress the plans in February, the £9.2m scheme was described as the authority's most expensive ever.
All but £150,000 was pledged by the Welsh government and European Regional Development Fund.
It was recommended councillors approve the costs, now estimated at £9.9m.
The target completion date for the development would be 2013.
It would include a new pedestrian bridge over the River Clwyd, extending the sea wall to provide up to 100 moorings, and the creation of a public square with shops, cafes and other buildings.
As a sign of its commitment, the council is now being asked to contribute an extra £500,000.
Councillor Julian Thompson-Hill, Denbighshire council's cabinet member for finance, said: "The costs have risen due to considerable design challenges but we recognise that this is a key strategic project in the regeneration of Rhyl.
"We have consulted widely on the proposals over recent years and the project will provide an attractive working harbour and tourist destination to the west of Rhyl.
"The visible support of the council in the harbour project will help build confidence to attract further private sector investment; this is vital to support further redevelopment in the town."
Officials recommended that councillors approve the proposal and earmark another £500,000 for a contingency fund for any future increase in costs.
That would take borrowing on the project to £1m.