The Ministry of Fisheries has given Wakatu Incorporation the go-ahead to create Marlborough's biggest mussel farm, despite opposition from conservationists.
The 770-hectare site in Tasman Bay is still subject to Marlborough District Council consent, so only two trial lines of the 350 proposed can be laid in the meantime.
In 2007, the ministry declined a similar application from the Nelson-based Maori company, as it believed the farm could affect commercial fishing.
The ministry's chief executive, John Beaglehole, says new research shows the marine farm will have less impact than previously thought.
Conservationists opposed the project on the grounds that the endangered Hector's dolphin would be threatened, but Wakatu says its research shows that won't happen.
The company says it will look at expanding the mussel industry overseas, particularly into the Chinese market.