The decision comes as the regional council considers a separate proposal for a marine farm with 19ha of oyster racks and 5ha of sea cages for kingfish inside Whangaroa Harbour.
Commissioners' chairman Rob van Voorthuysen, of Napier, admitted that even in its scaled-back form the mussel farm would have ``residual adverse effects'' on the outstanding natural character of nearby Cone Island, small boat anchorages and Maori customary fishing. Dolphins frequenting the area would also be displaced.
However, the commissioners believed that was outweighed by the ''significant economic benefits'' it would bring an impoverished part of New Zealand. The proposal also had the backing of the island's Maori owners, the Ririwha Ahu Whenua Trust.
A report by economist Fraser Colegrave predicted the farm would provide jobs for 87 people in Northland and another 21 elsewhere while boosting the region's GDP by $5.5 million.
Mr van Voorthuysen said any marine farm would have adverse effects wherever it was built. However, the mussel farm's location - in the lee of a highly modified island whose owners strongly supported the proposal - was preferable to other locations closer to the mainland or with less modified natural backdrops.
Pete Sehmb, spokesman for the Whangaroa Sport Fishing Club, said the decision meant Northlanders would lose a valuable fishing ground and a safe haven for boating.
''For the small boat owners, when it's a bit snotty out there Stephenson Is is a safe place you can take the family out for a spot of fishing. This is a big chunk of water that will be lost to the community and to family boaties. I don't think that's fair at all,'' he said.
The club would consider appealing to the Environment Court but cost was likely to rule it out.
Mr Sehmb believed the mussel farm was part of a wider government push for aquaculture in which less affluent areas like the Far North were targeted because locals could not afford to fight back.
Totara North man David Keys, spokesman for a proposed Whangaroa Maritime Recreation Park, was also disappointed with the decision given the compelling environmental, recreational and scenic arguments against the farm.
''Most importantly there were more than 260 submissions against it, which is unprecedented in the Whangaroa area. The people didn't want it.''
The group was considering its position but would almost certainly appeal, he said.
The regional council consents will allow the company to farm mussels and collect spat as well as occasionally raising other shellfish such as oysters, paua and scallops. The proposal attracted 278 submissions when it was publicly notified in October 2011 - 14 in support, two neutral, and 261 against.
The consent will last for 35 years. The company will have to lodge a $132,000 bond to pay for a clean-up in case the operation folds.
Opponents have 15 working days to appeal the decision in the Environment Court.
Westpac Mussels Distributors already grows green-lipped mussels at Houhora in the Far North and the Coromandel Peninsula. It is owned by the Antunovich family of West Auckland.