The Office of the Auditor-General has confirmed it will investigate a property deal between Christchurch City Council and developer Dave Henderson.
The council has agreed to pay almost $17 million for five properties owned by Mr Henderson.
The deal has drawn criticism from those who believe Mr Henderson contributed to Bob Parker's successful mayoral campaign.
However, both Mr Parker and Mr Henderson deny there was any contribution.
Opponents also say council guidelines were not followed, but Mr Parker says there are situations where guidelines can be overruled because of urgency, adding that it was important to buy the five properties for the city's revitalisation.
He says he welcomes the decision to initiate a formal investigation.
Eight complaints have been lodged with the Office of the Auditor-General, which will examine the council's decision-making processes.
