Hawke's Bay Regional Councillor Debbie Hewitt will not be participating in any future discussions or decisions regarding the Ruataniwha Dam.
A conflict of interest cloud has hung over Mrs Hewitt's head for the past month as her property sits in what appears to be a part of the dam's footprint.
This has seen both the council and the councillor seeking out legal advice on the matter.
The council's advice is that Mrs Hewitt may have a pecuniary interest on matters relating to the dam, which resulted in her asking Auditor General Lyn Provost for her opinion on the matter.
"Any pecuniary interest I might have is uncertain and in any event no different to that of the general public," Mrs Hewitt said.
"[Or] it is so remote and insignificant that it cannot reasonably be regarded as likely to influence me in voting on or taking part in discussions relating to the [dam]."
She said she has yet to receive a response from the Auditor General.
"It is with regret that I must decline to participate in any discussions or decisions regarding the RWSS until such time as I receive a decision from the Auditor General confirming it is appropriate for me to participate in such discussions or decisions."
A spokesman for the Office of the Auditor General confirmed they had received an application from Mrs Hewitt under the Local Authorities (Members' Interests) Act to take part in decisions about the dam.
"We are aware of the issues regarding Cr Hewitt's potential conflicts of interest," he said.
"We are working through these issues with the Council and Cr Hewitt, and we are currently waiting for some further information to support her application."
He said it was not appropriate for the office to comment any further.