Key Points:

Aucklanders will get a new public park and an island volcano will be restored as part of a deal for the disposal of treated waste from Auckland's major wastewater treatment plant.

Watercare Services has entered into an agreement with the Kelliher Charitable Trust that will see the quarried part of Puketutu Island in the Manukau Harbour rehabilitated with treated biosolids from its nearby Mangere plant.

Subject to a successful application for resource consents, the solid byproduct of the wastewater treatment process will be carted over the causeway to the island.

In return, Watercare has agreed to pay the trust $25 million for a long-term lease.

Under the agreement, parts of the island, which is private property, will be open to the public within three to six months of obtaining resource consents.

The long-term ownership of the island will ultimately pass to either the Auckland Regional Council for use as a regional park or to a charitable trust set up for that purpose, similar to the one that runs Cornwall Park.

"We believe this represents a wonderful opportunity for the people of greater Auckland," said Watercare chairman Graeme Hawkins.

The island was bought by Dominion Breweries founder Sir Henry Kelliher in 1938 as his farm and home. Before his death in 1991, he transferred ownership to the trust, which uses income from the island's assets for public good, including the Kelliher Arts Trust and Kelliher Economics Foundation.

Trust chairman Harry White said the decision to divest the island would allow the trust to create value for future charitable purposes while securing the long-term future of the island as a regional park.

ARC chairman Mike Lee said the island had long been on its wish list and he was pleased at the progress that had been made towards the delivery of the region's 26th regional park.

"I regard this as a stunning initiative of great benefit to the wider community," said Mr Lee.

In 2002, the council opposed a trust application to add a 24-unit motel to the island.

The council is awaiting a decision on its appeal to the High Court over the Environment Court clearing the way for Living Earth to set up on the island, recycling 75,000 tonnes of garden waste a year.

Watercare must apply for resource consents from the Manukau City Council and the ARC.

Manukau Mayor Sir Barry Curtis said he supported the arrangement - "subject to resource consent" - to recreate over time "the magnificent volcanic cone formation".

Local Maori welcome the prospect of turning back the clock on the island to its 1950s state - before thousands of tonnes of its scoria and basalt rock were removed for projects such as the Auckland International Airport.

Makaura Marae environmental spokesman Saul Roberts said the island was a cultural icon of the Tainui and Waiohua peoples.

"We admire any initiative taken regarding rehabilitation and restoration of the island, more particularly at this time when quarrying activities have effectively destroyed a number of its sacred sites."

The volcano has pa sites, terraced cones and kumara pits and ARC site testing suggests that Maori may have been resident on Puketutu Island as early as the 12th century.

Watercare said the 61 tonnes of dry, cleaned biosolid its plant produced daily was being used to return 35ha of former oxidation ponds to a pleasant harbourside area.

But the company would soon need an additional site for disposal and the island's quarry, about 3km away, would take 30 years of biosolids production.

Carparks and a walkway around the island are also proposed.

Bruce Hayward, of the Geological Society, said he welcomed the restoration of the island which was composed of lava flows capped by multiple scoria cones. "Puketutu island is the Browns Island of the Manukau," Dr Hayward said. Sir Henry turned a scrub-covered island into a showplace of idyllic rural ambience where his pedigree livestock and champion racehorses grazed in the shelter of stone walls and towering trees.

His Spanish-style mansion and expansive garden, featuring an authentic Samoan fale, hosted garden parties for charities that were the highlight of the summer social scene.

The 1992 film Black Stallion was filmed there and the island was the retirement home of champions such as the great pacer Cardigan Bay, New Zealand's first million-dollar stake earner Bone Crusher and broodmare Double Game.

Winstone Aggregates runs the quarry in accordance with a management plan agreed to by Manukau City Council. The island, once known as Weekes' Island, is one of the Ihumatao volcanic group.

Dr Hayward said Auckland had lost many of its 50 or so volcanoes through quarrying and reclamation. However, three notable exceptions - Browns Island, part of One Tree Hill and the cone of Mount Robertson at Otahuhu - have been saved by philanthropists.

Puketutu Island

* An island volcano in the Manukau Harbour.
* Size: 200ha.
* Linked to the mainland by a causeway at Mangere.
* Owner: Kelliher Charitable Trust.
* Present uses: Quarrying, farming, weddings and functions in the restored homestead of the late Sir Henry Kelliher, film location.
* Closed to the public but can be seen from One Tree Hill.