The Hawke's Bay Regional Council has voted to take action over perceived conflicts of interest among councillors regarding the proposed $600 million Ruataniwha water storage project.
The costs include about $260 million for the dam and about $350 million for associated infrastructure, which will be funded by farmers.
The mayors of Hastings and Napier have raised concerns that three regional councillors are also directors of the council's investment company, HBRIC, which is pushing the dam project.
They are concerned those councillors would have a pre-determined position when the regional council takes the final vote on whether to approve the project.
At a meeting on Wednesday, councillors voted to request a report on options to reduce the perception of a conflict of interest.
The Auditor-General has already investigated after a complaint from Transparency Hawke's Bay, and concluded there is presently no conflict of interest.