The Crown and northern South Island iwi Ngati Apa have signed a deed of settlement worth over $28 million.
The agreement on Friday includes an apology for breaches by the Crown of the Treaty of Waitangi.
Treaty Negotiations Minister Chris Finlayson says settling with Ngati Apa was difficult because of complex historical relationships between rival claimant groups in the upper South island.
Ngati Apa is the second of eight iwi in the region to complete a settlement.
Other groups in the area include Ngati Toa and Rangitane, and their negotiations have also involved disagreements on the proper border with Ngai Tahu further south.
Mr Finlayson says this agreement is one of several around the country which he hopes to complete over the next few months.
The southern Ngati Apa is distinct from North Island iwi Ngati Apia, whose settlement was signed in 2008.