South Taranaki District Council has been given the go-ahead to fluoridate the water supply in Waverley and Patea.
The Court of Appeal has ruled in favour of the council, rejecting anti-fluoride group New Health New Zealand's argument that fluoridation of water amounted to medical treatment, which the public should therefore have the right to refuse.
The ruling follows a four-year legal battle that began when the lobby group took the matter to the High Court, where the council's right to fluoridate the supply was also upheld.
The Ministry of Health then passed a regulation declaring fluoride was not a medicine, after the High Court recommended it consider passing a regulation under the Health Act to put the matter beyond doubt.
The decision also awards costs to the council. It has been reported the court action has cost it about $250,000, although the Ministry of Health helped fund the case as it was an issue of national interest.
Water New Zealand chief executive John Pfahlert said the Court of Appeal ruling showed common sense had prevailed.
"It now means that ... the council is able to extend fluoridation to residents who have not had the benefits of added fluoride in their public water supply," he said.
"The benefits of fluoride protection for dental health are irrefutable and pose no health risks at the recommended level of 0.7 to 1.0 parts per million in drinking water."
Mr Pfahlert said it appeared anti-fluoridation campaigners had deliberately targeted a small council and been able to hold it to ransom. That was one reason Water NZ supported the proposal to shift responsibility for fluoridating water supplies to district health boards, he said.
"Fluoridation is a public health issue and it should not be left to councils to be responsible for making decisions over the dental health of communities."