The Court of Appeal has ruled in favour of the Central Plains Water Enhancement Scheme, giving it priority to take water from the Rakaia River over a dairy company with a rival claim.
In October, the $135m Central Plains scheme was granted consent to take water from the Rakaia and Waimakariri rivers for a large irrigation scheme in Canterbury.
Dairy company Synlait had also proposed taking water from the Rakaia to irrigate dairy farms.
Synlait had been in dispute with Central Plains over access to the water and in 2008 was awarded priority by the High Court in Christchurch.
That decision has now been overturned in a decision released on Friday by the Court of Appeal.
Central Plains Water Limited chair Pat Morrison says he hopes it is the end of what has been a long-running battle.
Farmer fined for illegally taking water
Meanwhile, a Canterbury farmer has been fined for taking water illegally from the Waitaki River.
In January, William Pile extracted 277 cubic metres of water for irrigating pasture without resource consent.
Judge Jane Borthwick says that if the Canterbury region's waters are to be sustainably managed, unlawful taking of water cannot be allowed. She says the sentence imposed, a fine of $9000 and court costs of $243, will act as a deterrent to others.