The Department of Conservation is to withdraw an objection to a TrustPower hydro power scheme in return for new undertakings by the company.
DOC says it will not appeal to the Environment Court over consents granted to the company for the 50km canal project on the Wairau River in Marlborough.
TrustPower will spend up to $4 million protecting the endangered black-fronted tern and other rare birds. It will also reduce its water intake in the nesting season.
Groups opposed to the scheme say DoC has sold out to the company, but Nelson-Marlborough conservator Neil Clifton says TrustPower's undertakings address its concerns.