"For years, even generations before us, elders have sought to rebalance the scales and this is a honorable and brave start.
"The city of Tauranga was built on land confiscated from Maori, that block gave impetus to Tauranga in the early days and it has thrived, the Port has thrived, the economy has thrived. This move by council is bold and brave and it is a step to start that rebalancing."
Mr Crosby said council could not go any further with current proposals from iwi for council land, such as the Mauao reserve, until a policy was implemented.
"In the past council has looked at proposals from iwi individually, case by case," he said.
"But we need to have a holistic plan, a black-and-white way that council can address land requirements in relation to tangata whenua in the future.
"Instead of a case-by-case basis we will have solid policy with criteria to assist the decision making process."
Mr Crosby said council expected there to be a number of claims on council land in the next decade as treaty settlements were wrapped up.
"The first issue for tangata whenua is getting treaty settlements in place then they will seek to approach council over land that we are in control of, which is why we need this policy.
All future decisions will be based on it."
Mount Maunganui hapu Ngai Tukairangi announced it was seeking ownership of the reserve at the base of Mauao occupied by the Beachside Holiday Park and the Mount Hot Pools in August 2013. The claim related to the title of the land and not the businesses.
The rest of the mountain was vested in Tauranga Moana's three iwi by an agreement signed with the Crown in 2008.
The proposed gifting of the 5-hectare reserve to Ngai Tukairangi would be on condition the businesses continued to be owned and operated by the council, with public rights of access guaranteed in any agreement.
There would be no threat to the Mount Maunganui Surf Club's lease, which had 25 years left to run.