Tauranga City Council has reached a settlement with an owner of one of the homes of the failed Bella Vista development.

The council announced the deal with the owner of 299a Lakes Boulevard this afternoon, stating the settlement was made by negotiation.

The council agreed to take ownership of the property in exchange for paying the owner all wasted expenditure.

In a written statement, the council said the terms of the settlement were confidential "but the parties have worked constructively in reaching a resolution that enables the owner to move on from Bella Vista".

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The deal follows the council's buy-out offer last month. It agreed to make offers to buy the 21 homes in the failed subdivision for the price homeowners initially paid plus expenses.

Council chief executive Garry Poole said the council had to balance the interests of homeowners with those of Tauranga ratepayers. He expected the council's insurers would pick up the "vast majority" of the buy-out cost.

Tauranga Mayor Greg Brownless initially confirmed to NZME the council had unanimously agreed to make the offers but would not say how the offer amounts were calculated.

The offer was based on advice from former Court of Appeal judge Rhys Harrison QC.