The Otago Regional Council has rejected the advice of its own hearing panel and approved a request to include a Central Otago irrigation scheme in its long-term plan.
Tarras Water Ltd wants the council to contribute $3.5 million to the almost $40 million project.
The hearing panel of regional councillors and council chairman Stephen Woodhead recommended that the council not include the scheme in its long-term plan.
But the councillors voted 7 to 3 to ignore that.
Tarras Water chairman Peter Jolly said he is delighted that the council ignored its own advice and believes it has taken a bold step.
"Well, they went against a recommendation - and that doesn't happen very often. They've debated the subject very thoroughly and they've come up with what I believe is the correct decision, but a courageous decision."
Mr Jolly said planning for the scheme would continue.
The public will also get to have a say on whether the regional council should contribute financially to the project.