Whangarei Mayor Morris Cutforth says ratepayers will not have to sacrifice the goal of a clean harbour to build a $12 million arts centre.
Whangarei District Council has voted to go ahead with a building conceived by the late Austrian artist, Friedrich Hundertwasser, in 1993.
Objectors have complained that their money would be better spent on improving sewerage systems to stop harbour pollution.
But Mr Cutforth says says $8 million approved for the arts centre is just 1.5% of the council's spending over 10 years, and the rest will come from charitable grants.
Critics of the project say the council is ignoring a majority of submissions opposed to the project.
Some have called the building design outlandish, out of keeping with New Zealand culture, or unaffordable.
Mr Cutforth says he earlier favoured a referendum on the issue, but he was convinced by arguments that the council should take responsibility, and make the right decision for the district.
Former mayor Stan Semenoff who launched the Hundertwasser project in 2007, says it will lift Whangarei's status with the international arts and tourism sectors
He says it will be a game-changer for a city that has been associated for too long with poverty and welfare dependency.
The council has previously said the Hundertwasser building is expected it to draw 220,000 visitors per year to Whangarei, with an annual economic benefit of more than $3 milllion.