The council consulted the four iwi in the Whanganui District - Te Rūnanga o Tupoho, Ngā Rauru Kiitahi, Ngā Wairiki o Ngāti Apa and Te Rūnanga o Tamaupoko - in April 2016, before the forests were put on the market.
The council also informed Tupoho about the sale not long before it happened, trust project manager Tracey Waitokia said.
The trust was not in a position at that time to purchase or negotiate, due to reasons the council was told.
It has always been the focus of the Iwi to try to get as much whenua (land) back into hapū or iwi ownership as possible, Waitokia said.
"We have had discussions with them in regards to our stance, and we had also expressed our interest in the whenua, not the forest."
In New Zealand law, land and trees can easily be separated in a sale agreement.
Despite missing out on the land, the trust is excited and encouraged that Summit intends to hand over 148ha.
"We believe this is a great step towards acknowledging the iwi's manawhenua and we encourage these values," Waitokia said.
The Chronicle has contacted Summit Forests New Zealand general manager Henare Walker, to get more information about the gift.