That request was rejected because under existing laws a deceased person's sperm can only be used with written approval of the man.
Duncan was a minor when he died so legally no one other than him can use his sperm.
Duncan had gifted the sperm to his mother if he died, but there was no paperwork giving permission to use it in fertility treatment.
It is understood Sharon will argue her son intended the sperm to be used.
On Friday, Sharon said she had not heard about the extension because she had been overseas. She did not want to comment but was excited about what it could mean.
Duncan's sister, Chanel, said in a text it was "great news". "Thanks for letting me know."
Cameron's father, Rhys Duncan, was also pleased.
"It's cool how it's all worked out. It's what Cameron wanted to do. I'm not opposed to any of that but how it progresses from there I've left up to Sharon and to Nel [Chanel]."
The decision gives the family time to continue their legal bid to use Duncan's sperm for fertility treatment, allowing him to father a child despite his death in November 2003, at 17.
Duncan became a household name as he bravely shared his battle with bone cancer through his short films.
His work caught the eye of filmmaker Peter Jackson and his illness inspired the lyrics of Fran Walsh's Oscar-winning song Into the West.
Before starting chemotherapy, Duncan banked sperm.
He made no secret of his wish to father a child and wanted his sperm preserved.
Richard Fisher from Fertility Associates said a 10-year extension gave applicants time to work through seeking approval.
Fisher said the law was very clear around disposing of eggs and sperm at the 10-year time limit.
It was "almost certain" 10-year extensions had been given before, most likely to young people with cancer, he said.
He agreed with the committee's decision.
Fertility New Zealand president Nigel McKerras said the decision was "good news" and could help others facing delays.
