Gloriavale will keep millions of dollars in taxpayer funding after backing down over a refusal to assign identification numbers to preschoolers.
Officials from the Ministry of Education last year visited the isolated Christian community, based at Haupiri, about 60km east of Greymouth, over its stance.
Gloriavale's leaders were told government funding for its three early childhood centres - which topped $2.4 million over a year - was likely to be at risk.
However, Katrina Casey, the ministry's head of sector enablement and support, said Gloriavale had now allocated national student numbers to all enrolled children.
"Gloriavale's funding has not been affected...we worked with Gloriavale for a number of months to address the concerns they had raised about using [the numbers]. We're pleased that Gloriavale is now using the system."
Gloriavale did not return a request for comment.
Nationwide, most children in early childhood education (ECE) have been assigned a national student number under a new government project.
The ministry says the numbers are necessary as they give it an accurate picture of enrolment, attendance and teaching at ECE centres.
It has not revealed what exactly Gloriavale's concerns in regards to the student numbers were.
Initial fears within the ECE sector about how children's information might be used have largely been allayed after assurances and monitoring by the Privacy Commissioner.
The Education Review Office (ERO) last June awarded Gloriavale's three "Garden of Children" early childhood centres the highest grade of being "very well placed".
Ms Casey said there were 152 children enrolled at the centres and between July 2014 and June 2015 they received ECE funding of $2,403,844.
A recent a wide-ranging review of New Zealand's intelligence agencies - the SIS and GCSB - has recommended a law change that would give the agencies access on a case-by-case basis to national student numbers.
That would be largely to help guard against spies and terrorists entering the country as international tertiary students.