Debt-ridden Kaipara District Council in Northland has asked the Government to appoint commissioners to run it.
The council is struggling with debts of more than $80 million and a rebellion by ratepayers facing rates rises of more than 100% in some cases.
Local Government Minister David Carter says the council asked him on Monday to appoint commissioners to take over.
Mr Carter says the request has been made in the best interests of the district.
The mayor and councillors will remain in office until the commissioners arrive.