The Department of Conservation (DoC) will now consider whether it should give an Australian mining company permission for an open cast mine on its land on the West Coast.
Independent commissioners have approved an application from Buller Coal, a subsidiary of the Australian company Bathurst Resources, for the mine on the Denniston Plateau.
DoC says the company has lodged an application to use the land, and it must now consider the proposal and any effects it may have on the environment. There are more than 70 mines on DoC land.
The mine could produce up to two million tonnes of export coal per year, creating hundreds of local jobs.
Environmental groups oppose proposed mine
More environmental groups have voiced opposition to proposed mine.
Coal Action Network Aotearoa says burning coal is the dirtiest fossil fuel activity on the planet and New Zealand is ignoring climate change by allowing further coal production.
The organisation says it will support the groups taking ongoing legal action against the mine.
The West Coast Environment Network group says the damage to ecosystems and permanent loss of landscape cannot be compensated for.
Forest and Bird had earlier said it was considering lodging an appeal with the Environment Court.
The Green Party says it would support such a challenge.
Union says mine could be good for the district
One of the country's biggest unions says provided it is under good management, an open cast coal mine at Denniston Plateau would be a bonus for the district.
Engineering Printing and Manufacturing Union spokesperson David Reece, who represents workers at the Stockton Mine, says he doesn't know a lot about Bathurst Resources.
But he says the company has been mining in Australia and Canada for many years.
Mr Reece says workers who lost their jobs at Pike River Mine would be suitable for the proposed Denniston Plateau mine.