The island was bought by Dominion Breweries founder Sir Henry Kelliher in 1938 and is now managed by a trust.

The island was bought by Dominion Breweries founder Sir Henry Kelliher in 1938 and is now managed by a trust.

Aucklanders will get a new public park and an island volcano will be restored as part of a deal for the disposal of treated waste from Auckland's major wastewater treatment plant.

Watercare Services has entered into an agreement with the Kelliher Charitable Trust that will see the quarried part of Puketutu Island in the Manukau Harbour rehabilitated with treated biosolids from its nearby Mangere plant.

Subject to a successful application for resource consents, the solid byproduct of the wastewater treatment process will be carted over the causeway to the island.

In return, Watercare has agreed to pay the trust $25 million for a long-term lease.

Under the agreement, parts of the island, which is private property, will be open to the public within three to six months of obtaining resource consents.

The long-term ownership of the island will ultimately pass to either the Auckland Regional Council for use as a regional park or to a charitable trust set up for that purpose, similar to the one that runs Cornwall Park.

"We believe this represents a wonderful opportunity for the people of greater Auckland," said Watercare chairman Graeme Hawkins.

The island was bought by Dominion Breweries founder Sir Henry Kelliher in 1938 as his farm and home. Before his death in 1991, he transferred ownership to the trust, which uses income from the island's assets for public good, including the Kelliher Arts Trust and Kelliher Economics Foundation.

Trust chairman Harry White said the decision to divest the island would allow the trust to create value for future charitable purposes while securing the long-term future of the island as a regional park.

ARC chairman Mike Lee said the island had long been on its wish list and he was pleased at the progress that had been made towards the delivery of the region's 26th regional park.

"I regard this as a stunning initiative of great benefit to the wider community," said Mr Lee.

In 2002, the council opposed a trust application to add a 24-unit motel to the island.

The council is awaiting a decision on its appeal to the High Court over the Environment Court clearing the way for Living Earth to set up on the island, recycling 75,000 tonnes of garden waste a year.