South Wairarapa mayor Adrienne Staples said she was "thrilled to bits" to learn the super-city idea was off the table.
The Commission had recognised Wairarapa people did not support a super city.
"We certainly don't see Wairarapa being strongly governed from Wellington."
She said although a lot of money had been spent in Wairarapa on trying to find a solution to local body governance - it is thought to be around $1million - it was not money "totally wasted".
"There has been a lot of consultation, research and reports prepared that can be called on in the future," Mrs Staples said. It was too early to speculate as to what would now happen.
"It is time to refresh our thoughts. We are open to thinking outside the square but it does seem the commission needs to do some innovative thinking and not to be constrained by the Act it works under."
Carterton mayor John Booth said scrapping the super-city concept was the outcome most Wairarapa people wanted.
He said the positive side of the whole affair had been that it had brought the three district councils much closer together.
Only this week all three had met in the Carterton Events Centre to hear long-term plan submissions. "There is a wonderful attitude."
Mr Booth said he would happily be part of "rational and sensible" consultations with the commission on what would now happen. Scrapping the super-city proposal has taken the pressure off and it was time to "take a deep breath, a step back and look around us to see what would now be the best result".
"One thing is certain. The next reorganisation has to put something in place that will last for a long, long time, whether that is for a single Wairarapa council or not."
Masterton mayor Lyn Patterson said she was delighted the commission had dropped the super-city idea, but the process of change still remained with the commission.
"All the other applications, including a Wairarapa Unitary Authority, are still on the table - they are still live," she said.
Mrs Patterson said although the super-city idea had been killed, people still wanted to see "structural change".
Regarding the money so far spent, Mrs Patterson said any change in governance brought a cost.
"To my mind it was not so much the money but the time spent," she said.
"It has been four and a half years since this started."
A joint application from the three councils for a stand-alone unitary authority was submitted in May 2013, which would involve all three councils and Greater Wellington Regional Council.
In its decision yesterday the commission recognised the lack of community support for a super city.
A new approach would "enable the development of options that reflect community feedback".
"The commission is looking to develop sufficient consensus on the opportunities and challenges in the regions and how good local government can help to manage them."
Most people who had opposed the super-city concept had done so, according to the commission, because of a preference for the status quo, more localised democracy, and because they were concerned over the risks of large-scale change.
A minority supported the proposal because it would streamline and improve decision-making and set a foundation for future prosperity.
The commission has issued a final proposal for reorganising Hawke's Bay local government that would see a single new council, called Hawke's Bay Council, with five local boards sharing decision-making and representing the interests of the region's varied communities.
If implemented, it will replace the Napier City, Wairoa District, Hastings District and Central Hawke's Bay District and Hawke's Bay Regional Councils.
