The legislation that will result in Canterbury's regional councillors being replaced with a panel of commissioners has been passed under urgency on Wednesday.
The law change allows for the appointment of the panel, which will have judicial and democratic oversight of the Canterbury Regional Council.
Opposition parties told Parliament the removal of democratically elected councillors is a mistake, but the Government says it's necessary to fix long-standing problems at the regional council.
Environment Minister Nick Smith told Parliament it was a difficult but necessary decision.
"Environment Canterbury has been unable to deliver a robust and effective framework for the management of natural resources and that in my view is holding back the region of Canterbury both economically and environmentally."
The Maori Party changed its vote on the third reading, opposing the bill, but the National Party had enough support from ACT and United Future to pass the legislation through all of its stages.
Earlier on Wednesday, more than 100 people protested in Christchurch over the decision to replace the councillors.
The protesters say it is anti-democratic and the Government is making way for large amounts of water to be taken from rivers, to irrigate the land for what they say are unsuitable uses on the Canterbury plains, such as dairy farming.
Agriculture minister denies conflict of interest
The Green Party is asking the Auditor-General to investigate a potential conflict of interest with Agriculture Minister David Carter, over replacing the council with commissioners.
Environment Minister Nick Smith says Mr Carter was not at a Cabinet meeting on Monday when it made the decision.
The Greens say Mr Carter failed to tell Cabinet he could potentially benefit from the change, because he has a farm that takes water from the Hurunui River in Canterbury.
Mr Carter denies the accusations. In a statement, he says any changes to water usage from the Hurunui would not impact on his farm's consent, which was granted four years ago.
Greens co-leader Russel Norman says Mr Carter also tried to get a group of people who want the river protected from being damned and used for irrigation to put the process on hold.
Mr Carter, who is currently in China on ministerial business, says he was trying to take a collaborative approach to avoid a combative and expensive legal process.
Prime Minister John Key said in Parliament he does not recall Mr Carter raising a conflict of interest in Cabinet.
