Iwi are set to be at the front of the queue to buy any property sold by South Taranaki District Council.
The council is reviewing how it buys and sells property to make sure it supports community outcomes, well-being and other priorities.
Te Korowai o Ngāruahine suggested creating a first right of refusal when a draft policy was put to the council's Iwi Liaison Committee in September.
Other iwi representatives supported the idea and the council has now included it in the proposed policy.
Under the earlier version of the policy, the council would only have advised iwi first about surplus property, but not offered a first right of refusal.
The proposed Property Acquisition and Disposal Policy says "relevant iwi will be provided with the opportunity to purchase surplus property prior to it being sold via an open market process" if there are no complicating legal issues.
"The relevant iwi will determine if they have an interest in purchasing the property and which iwi or hapū will proceed with the purchase.
"Market value will be paid for surplus property via first right of refusal."
The exception to the iwi-first policy will be if the sale is a strategic disposal, defined as "a disposal approved by council for a specific purpose".
At the request of the council's iwi liaison committee, the fraught history of land confiscation in South Taranaki is set out at the beginning of the policy.
It acknowledges the history of confiscation and Treaty settlements with Taranaki, Ngāruahine, Ngāti Ruanui and Ngā Rauru Kītahi.
"The council acknowledges the history of land ownership through confiscation and the Crown settlement process in South Taranaki."
Any processes relating to specific council properties that the Crown agreed to in settlements will trump the new policy.
Council officers advised councillors that acknowledging the history experienced by Māori and iwi "indicates the council's intention to continue to develop relationships and partnerships with iwi".
The proposed policy has been approved by the iwi liaison and policy and strategy committees and will go to the full council for final sign-off on December 13.