"It's great for whanau," Mr Mackey said.
"It means they can relocate back onto their own land that's been in their families for a thousand years or so."
Although such initiatives were underway in other parts of the country, Hastings had led the way with this work, he said.
The award judges noted the issues the Hastings council's policy addressed had been ongoing, and that by working with other sector agencies, as well as whanau trust, land trusts and Ahuwhenua trusts the council had been effective in supporting Maori to occupy Maori land.
"The released land will contribute to housing and bring all the social good that goes with that, at a time when housing is a pressure point," the judges said.
Other finalists in the same award category are: Hauraki District council for its economic development strategy, Rotorua Lakes Council for its Rotorua mountain bike strategy, Selwyn District Council for an Izone business park development and West Coast Regional Council for its Untamed Natural Wilderness brand development.
The awards are in their fourth year, established to recognise and celebrate the key role local government plays within New Zealand communities.
From 56 applications, 17 finalists for five awards had been named, with winners to be announced at the LGNZ conference dinner in Auckland on July 24.