Wellington Chamber of Commerce is pulling its threat of legal action over the city council's plans to extend the living wage to its security guards.
The council last year voted to pay them $19.25 an hour rather than the minimum wage of $14.75.
The Chamber of Commerce had earlier planned to ask for a judicial review in the High Court over the decision, which it said went against the advice of the council's own staff.
However, in a joint statement, the council and the chamber said they were in discussions and close to a potential solution that would allow the former to continue being a leader on the living wage.
The chamber said it wanted the council to provide a clear position on the matter.