Diagnostic Medlab's re-entry to the Auckland community medical testing market has been confirmed today.

The Auckland region's three district health boards have rehired DML to take over around ten per cent of the workload that was controversially given to the new company Labtests in August and September.

Auckland DHB chairman Pat Snedden announced the dramatic new turn to reporters at Auckland City Hospital this morning.

He said bringing back DML was necessary to decrease the pressure on Labtests and followed serious concerns by many clinicians in the region about Labtests' service.

DML will be given responsibility for testing private hospital patients, private specialists' patients, resthome residents and fertility clinic patients.

Today's announcement ends the exclusivity of the contract between Labtests and the DHBs. The contract between DML and the DHBs will start before the end of October and run for four years.

The annual price paid to DML under the new four-year contract will be $10.6m. Of this, $6.2m will be sheared from the current contract the DHBs have with Labtests, while the remaining $4.4m will come from DHB coffers.

Today's announcement has been welcomed by the New Zealand Medical Association.

"The decision by the Auckland District Health Boards goes some way towards reducing the inherent risk in the current arrangement of having a single provider and is therefore a step in the right direction," said NZMA GP Council Chair Dr Mark Peterson.

Since the transition to Labtests earlier this year, DML had kept on more staff and collection centres than it needed in the hope it would be asked to take back some of the $70 million-a-year community laboratory work it lost.