The WorkSafe report said St Kent's trust board proposed the enforceable undertaking as an alternative to prosecution.
The school is required to go through a restorative justice process with the victims, including payment of an unspecified amount of money to the victims, as well as spending around $80,000 on processes to improve health and safety standards at St Kent's and across New Zealand.
While the injuries were "very serious" and the school failed in its duty to students, it was an isolated incident, WorkSafe general manager of operations Brett Murray said in his decision to let the school avoid prosecution.
The victims "have also expressed a desire not to be involved in a prosecution process, which would have the potential to further traumatise them".
Tonight the school board apologised and admitted the students suffered life-threatening injuries.
"Saint Kentigern Trust Board has entered into an enforceable undertaking agreement with WorkSafe New Zealand. This agreement has been reached following WorkSafe's investigation into an accident in which very serious injuries were sustained by two students at the College production last year."
Trust Board deputy chair Dr John Kernohan said the Board "sincerely apologises for the fact that the accident happened and for the harm caused to all those families involved.
"Saint Kentigern accepts that it should have done more to acknowledge the seriousness of what happened immediately after the accident. The injuries were not minor. The injuries were significant and life threatening."
The statement continues: "Individual members of the Trust Board personally feel deep regret and take full responsibility for the emotional and physical harm that has been suffered by those students involved. Ensuring that all students can learn in a safe environment remains Saint Kentigern's first priority.
"As part of the enforceable undertaking agreement, Saint Kentigern is entering into a restorative justice process with the families, and will not comment further until this process is completed."
The show re-tells the Victorian melodrama of Sweeney Todd, an English barber and serial killer who kills his customers with a razor and, with the help of Mrs Lovett, a struggling pie shop owner, turns their corpses into meat pies. The musical was made into a hit film starring Johnny Depp and Helena Bonham Carter.
The owner of an antique shop where the razors were bought for the school play told the Herald last year the person who purchased them had talked to one of his staff members about the need to cover up the sharp edge.
The man said he believed the person was a teacher at St Kentigern College, "a really nice chap," who said the razors were going to be used in a production of Sweeney Todd.
Two pupils of the school were taken to hospital on the night of the incident with cuts to their throats suffered during the production.
The owner could not immediately recall whether the man had mentioned it would be a high school production.
Kentigern College head Steve Cole told the Herald at the time the two the boys' whose necks were cut with a prop razor during the show were out of hospital and doing well.
In an interview with Newstalk ZB, Cole explained the "unfortunate" incident happened halfway through the performance's second act.
The prop was a razor which had been blunted and wrapped in several protective layers, he said.
"It's normal for Sweeney Todd to have such an instrument [and it] clearly had been checked many, many times.
"It has been bound and cellophaned and all sorts of things. It had been blunted and had been through all sorts of health and safety checks. It was a very unfortunate mistake."
The scene had been performed "many times" in rehearsals, including eight dress rehearsals where the prop was used.
When asked last year how two boys ended up with the sides of their necks cut, Cole said he didn't know.
"I've got no idea. I've got no idea."
Cole said last year he was not concerned about possible consequences for the school under new health and safety laws.
"I've given that no thought at all. We're very confident in our health and safety procedures. My concern is for the two boys and their families."
St Kentigern College is a private independent Presbyterian day and boarding school offering education for girls and boys aged 11 to 18 years.
It is described on its website as a contemporary, state-of-the-art, educational facility which remains true to its traditional Christian faith, values and Scottish heritage.
