The Government and Auckland Council are looking to negotiate a formal accord to make progress on Auckland's transport plans and secure some certainty on the city's most contentious and expensive issues.
The agreement is in the mould of the housing accord signed in 2013, which aimed to rapidly increase housing supply, and it could pave the way for more central government funding for transport projects.
Auckland Mayor Len Brown wrote to Transport Minister Simon Bridges this year to request an Auckland Transport Accord.
Mr Bridges and Finance Minister Bill English are now writing terms of reference for the proposed agreement.
Before it can be signed, the Government wants the council to agree on the mix of transport projects in the city's long-term plan and their impact on congestion. At present, the two parties differ on the best ways to reduce congestion around the city.
"It's really about seeing if we can get better alignment between Government and council on transport priorities," Mr Bridges said. "We're conscious that we don't want to make this too pointy-headed but it will be a quite complex, involved process, taking at least a year. We want to test each others' assumptions and see if we can get alignment on the numbers."
Mr Bridges wants the council to focus less on CBD and large rail projects and more on local roading projects in the outer suburbs of the city and bus infrastructure. He does not support an airport-CBD rail link, though this project does not feature in the council's 10-year plan and no money has been set aside for it.
If the two parties can reach an agreement, the Government will consider funding some of the agreed transport projects, or approving revenue-gathering tools such as motorway tolls.
Mr Brown said keeping Auckland moving was as important as providing affordable homes.
"It's not something either the council or the Government can achieve alone," he said.
Mr Brown and Mr Bridges were confident a deal could be reached.
This was despite a public disagreement last week between Housing Minister Nick Smith and Deputy Mayor Penny Hulse over transport issue.
The disagreement arose when Ms Hulse said the council would not approve new fast-tracked housing areas in rural Auckland unless the Government paid for the costs of new roading. Dr Smith responded by reminding the council of his powers to overrule local government.
According to Government and council sources, the dispute did not reflect a rift in the Government-council relationship.
But it was a symptom of the ongoing tension between the two parties which insiders say has existed since Cabinet ministers first sat down with Mr Brown in 2011, immediately after his election as the first Super City mayor.
The only reason this tension has not bubbled to the surface more often was because of Mr Brown's popularity levels. In his first term, Mr Brown had a strong mandate and was able to secure state funding for the City Rail Link.
Now that his popularity has waned in his second term, ministers feel more confident in publicly criticising the council and advancing their housing and transport agenda.