The Forest Research Institute has been given approval to field-test genetically engineered pine trees.
The Environmental Risk Management Authority decision was immediately attacked by Greenpeace as outrageous.
But a senior institute scientist, Dr Christian Walter, said he was very happy with the decision, which would lead to the advancement of science.
"We appreciate the authority's careful consideration and findings that the trials are safe in terms of bio-diversity and bio-safety."
Dr Walter said trials would not start until the Royal Commission on Genetic Modification had completed its inquiry and the moratorium on field tests was over.
The institute attracted one of the most strongly opposed proposals with applications to modify trees in two ways - for resistance to the herbicides Buster and Escort, and to modify reproductive processes to affect wood growth.
The decision comes after seven weeks of deliberations by a special committee of the authority.
At a three-day hearing in Rotorua last month, the committee heard views on the applications, which attracted more than 700 submissions, only five of them in support.
The applications were first made in June 1999 and were not affected by the moratorium, which came into effect this June.
But the day before the Rotorua hearing began, Forest Research said it would voluntarily delay the trials if they were approved.