The Electricity Commission has given final approval for an upgrade to the Cook Strait cable, having delayed a decision since July so affected parties could have their say.
The proposal will involve construction of new facilities at each end of the cable, as well as an upgrade giving a capacity of 1200 MegaWatts.
Its cost has been revised down from $728 million to $672 million.
The cable usually carries South Island electricity to the North Island, but proved invaluable in sending power in the other direction during the recent dry autumn.
The project has long been criticised by South Island generators for loading most of the cost of the project onto them.
Electricity Commission chairman David Caygill says a review of the pricing method will be considered.