Government ministers have approved the purchase of the Crafar farms by the Chinese company Shanghai Pengxin, providing an outcome for what its local subsidiary has called the country's most-discussed land transaction ever.
In a statement, Land Information Minister Maurice Williamson said he and Associate Finance Minister Jonathan Coleman had approved the Overseas' Investment Office's (OIO) new recommendation to allow the purchase of the 16 farms.
He said the ministers were satisified that even on the most conservative approach, the application met the criteria set out in the Overseas Investment Act.
Mr Coleman said the approval was given with 27 conditions to ensure the investment by Milk New Zealand - Shanghai Penxin's subsidiary in New Zealand - would deliver substantial benefits to New Zealand.
Spokesman for Milk New Zealand, Cedric Allan, said the company hoped to finalise the purchase and move onto the farms within a month.
"We have waited a long time for it, but have always been confident because we thought we had a good case."
He said the conditions would require an average of $1 million to be spent on each of the farms.
"That's really turbo charging them and also upgrading them from an environmental point of view. That's quite significant expansion."
Milk New Zealand would now talk to the receivers about settling the transaction and form a joint venture company with LandCorp to manage the farms. It would also have to buy shares in Fonterra for milk processing.
The approval also included strong conditions which, if they were not met, would require Milk New Zealand to sell the farms. Such conditions could not be imposed on a domestic purchaser.
He said the negative reaction to the purchase was unwarranted and talk about opening the floodgates to Chinese companies buying large land tracts was scaremongering.
"This has been the most-discussed land transaction in the history of New Zealand. China will still be one of the smallest owners of New Zealand farmland. It's 16 farms and there are more than 10,000 in New Zealand."
Sir Michael Fay - the leader of a rival bid by a consortium that had challenged the original consent - said the deal set a precedent that would "open the farmgates'' for a flood of other overseas investors.
He said the group was disappointed and its iwi members were "justifiably angry''.
See the Overseas Investment Office's new recommendation here.By Claire Trevett @CTrevettNZH Email Claire, BusinessDesk