The Local Government Commission has approved the amalgamation of Nelson City and neighbouring Tasman District Councils.
It says a new Nelson-Tasman Council will be more economically efficient and will be better for regional planning.
Nelson Mayor Aldo Miccio, who proposed the merger, says a combined council will also have more clout with central government.
However, Tasman Mayor Richard Kempthorne says the economic argument is unproven and a merged council will cost rural ratepayers a voice in decision making.
A referendum will be held in April and, if at least 50% percent of electors in each area agree, a new council will be elected in October.
