HBRC Chief Executive Andrew Newman said it was agreed, given what is now known of the events, that pursuing a court case would have no direct benefit to the Wairoa community.
"HBRC has worked with the Eastland Group to come up with a resolution that delivers tangible, positive outcomes for the people of Wairoa as well as the environment," he said.
"We respect the commitment the Eastland Group has made to come to a settlement in this issue."
Eastland Group will contribute $100,000 to a project to be agreed with the Wairoa District Council. The company is also signing a 10-year sponsorship agreement that will see it contribute $15,000 per year towards Wairoa-focused events and activities.
This sponsorship starts in April 2017, and is worth a total of $150,000.
The Hawke's Bay Regional Council will apply to withdraw all charges against Eastland Networks Limited and diving contractor Abyss Limited.
Eastland Group Chief Executive Matt Todd apologised on behalf of Eastland Network and Eastland Group to the Wairoa community.
"While this was an unforeseen event, the effects it had on the river ways and the people of Wairoa over the busy summer period were significant and distressing."
"As the local electricity lines company, we are part of Wairoa's everyday life, and take this responsibility seriously. We realise that our brand and reputation were damaged during the event," he said.
"We look forward to partnering with Hawke's Bay Regional Council and Wairoa District Council to deliver long-lasting projects that will benefit the whole community, and help restore our reputation as a good corporate citizen."
"Locals couldn't use and enjoy their river while the silt was discolouring the water. Although we can't restore the recreational value that was lost last summer, we can contribute to a new facility that will allow families to play and have fun beside the beautiful Wairoa river for years to come."
In addition, Eastland Group will cover Hawke's Bay Regional Council's external investigation costs up to $85,000, while Eastland Group's insurers are working with Wairoa District Council to settle its claim for costs associated with the water treatment plant.
As previously confirmed, Eastland Group and Hawke's Bay Regional Council are looking at the modification of the existing resource consents, which are over 30 years old. The intention is to make these clearer and more practical, to assist in the operation and management of the Waihi Dam.
Wairoa District Council Chief Executive Fergus Power said the agreement represented a first step towards a closer and improved relationship between Eastland Group and the Wairoa community.
"This community treasures its natural environment, and will always robustly advocate for its protection," Mr Power said.