"I think the minister has behaved very ethically."
Middleton said he still had issues with the government since Karla's 1989 murder.
"I have to be honest with you, I had a few problems with the system after Karla and what happened with her. It hasn't been a happy relationship but maybe this goes some way to fixing things up a bit."
Middleton said no big celebration was planned. Instead he would have a quiet evening with his family "and make plans for the future".
Middleton's 16-year-old son, who is Karla's half-brother, was "really stoked".
"He was probably the most relieved of all. "We had a bit of a handshake and a high-five."
A letter from his son, pleading with the minister to let his father stay, was among documents Middleton delivered to Parliament earlier this week to support his application for a review.
"It's fantastic. I just want to thank the Herald. You helped me turn around the tide on this."
The Herald on Sunday revealed at the weekend that Middleton was facing deportation.
Lawyer Keith Jefferies said he received a letter from Faafoi this morning.
In a statement, Faafoi said: "The Associate Minister has considered and made a decision in regard to the request for intervention for Mark Middleton.
"The Minister will not be commenting further on this case other than to note that he will speak with Immigration New Zealand to discuss the circumstances of the case and to ensure any possible lessons have been learned."
Jefferies said Faafoi would not have full confidence in Immigration. "This matter was a knee-jerk reaction. If they had investigated it properly before they issued a deportation order it wouldn't have been issued.
"You simply can't embark on any type of immigration inquiry with any credibility until you know the status of the person asked to leave the country."
Jefferies said he would look very closely at the propriety of the action and "would probably sue" Immigration New Zealand over its treatment of Middleton.
"It was maladministration and they had no right to do it the way they did it, and that's quite serious. There's a whole list of breaching his civil rights. It's quite outrageous to be dragged out of your workplace. That's not the way New Zealanders are meant to behave."
Jefferies suspected Immigration NZ had lost Middleton's records from the time he arrived with his parents in 1962.
Immigration NZ assistant general manager Peter Devoy said in a statement that INZ did not comment on visa decisions made by the minister and would e making no further comment.
Middleton, who lives in the Hutt Valley with Karla's mother Veronica, moved to New Zealand when he was 4.
Immigrants from the United Kingdom were granted permanent residency if they arrived before April 4, 1974.
Middleton was confronted by Immigration officers at his work place last week and told he was an overstayer. He spent 36 hours in a police cell.
An Immigration New Zealand spokesman told the Herald on Sunday Middleton came to its attention last year and the department prioritised cases for deportation for those engaged in criminality or who posed a risk to the immigration system.
Middleton was sentenced to nine month's imprisonment in 2001 for threatening to kill Karla's killer, Paul Joseph Dally, but the sentence was suspended and he did not serve time.
Karla was 13 when Dally snatched her from Lower Hutt in 1989. He raped and tortured her before burying her alive. Dally has been in prison for 28 years, having been denied parole several times.
