Nelson Mayor Aldo Miccio intends to form a group to produce a new proposal to merge Nelson City with Tasman District Council.
Preliminary referendum results issued on Saturday show the majority of voters in Nelson supported the amalgamation. However, that was not the case in Tasman.
Majority support was needed in both areas if the plan was to go ahead, but Mr Miccio says the referendum result is not the end of the debate.
He says there is no reason a region with 90,000 people should be governed by two bureaucracies, and an amended proposal should be ready to go to the Local Government Commission within the next two months.
Tasman District Mayor Richard Kempthorne says submissions to the commission and the poll itself cost about $300,000.
Mr Kempthorne, who did not support the merger, says many voters were worried they would not be represented well by a bigger council, and their opinion should be respected.
The poll required at least 50% support for the proposal in each area before it could go ahead.
In Nelson City, 10,276 people, or almost 57% of voters, supported the merger.
However, a majority in the Tasman District were against with 16,532, or more than 74%, rejecting it.