A $100,000 reward and immunity from prosecution is being offered by police for information about the disappearance or death of Southland toddler Amber-Lee Cruickshank.

Her family say it is their last hope of finding out what happened to the little girl - who vanished without a trace almost 29 years ago.

Amber-Lee was last seen on October 17, 1992 at Kingston, a small town at the southern end of Lake Wakatipu.

The toddler vanished after spending an afternoon with her family and friends near the lake and despite exhaustive land and water searches there has been no sign of her in almost three decades.

Police announced on Tuesday that they will pay up to $100,000 for material information or evidence which leads to the identity and conviction of any person or people responsible for Amber-Lee's disappearance.

And they will consider immunity from prosecution for any "accomplice" who provides information or evidence to police as long as they are not the "main offender".

Nicola Cruickshank on the shores of Lake Wakatipu. Photo / Supplied

Detective Inspector Stu Harvey said after 29 years police hoped someone would finally come forward and help them solve the mystery.

"While we don't know where she is or what happened, we believe she may have been the victim of foul play," Harvey told the Herald.

"There is someone out there who holds the key to the truth."

Harvey said over the years police had conducted a significant number of inquiries into Amber-Lee's disappearance.

"We have gone to great lengths to explore different scenarios and investigation leads without success," he said.

"Her mother and family members have been left to worry and angst about what happened to this very young child for far too long.

"We want to bring them answers and closure."

Amber-Lee's mother Nicola Cruickshank spoke to the Herald about the reward offer.

"Twenty nine years of not knowing what happened to our beloved Amber-Lee has been 29 years of pain, anger, frustration and torment - with endless searching and praying for this nightmare to end," she said.

"To have answers, to have closure, to have Amber-Lee come home - that's all we want.

"And now we are living in hope, praying that this reward will enough to entice whoever holds the key to the truth of Amber-Lee's disappearance and her whereabouts to come forward - whether she has passed, or is alive."

Cruickshank said she had never given up hope her little girl would be found.

"We have done everything possible and within our power to find the answers," she said.

"I feel this reward is our last resort."

She appealed to anyone with any information to speak up.

If you have information contact police on 105 and reference Operation Oliver: 921030/2144.

text by Anna Leask, NZ Herald