Rangiora man Keith Falconer sparked a Government intervention after he was denied paid parental leave following the death of his partner who died after giving birth.
The baby was born at 33 weeks by C-section after the mother's heart stopped as she arrived at hospital.
After the C-section she started breathing again but then her heart stopped again and she had severe bleeding.
She was taken to surgery but died an hour later.
Workplace Relations Minister Iain Lees-Galloway said today that Falconer would receive an ex gratia payment of the equivalent amount to the paid leave he had missed out on.
An ex gratia payment is a one-off, no-obligation grant.
"It has changed it enormously," the father told Newstalk ZB.
"[It is] nothing really to celebrate, but today is a small victory that is going to change my life."
Falconer wasn't expecting an outcome, and received a call from a Government employee this morning saying there would shortly be an announcement.
He said his partner planned to be a stay-at-home mum, and didn't have a job in the 12 months leading up to the expected date of delivery so she wasn't entitled to paid parental leave, according to the Ministry for Business, Employment and Innovation.
Falconer was also looking after his partner's two kids from a previous relationship and was being supported by his work.
But that is not a sustainable option and he wanted to get access to paid parental leave.
His employer and colleagues had been very supportive, he said.
"I am overwhelmed. My employer has gone the absolute extra mile for me, and all the people at work have supported me through this."
He also thanked the social workers at the neonatal unit in his "complicated case".
Lees-Galloway said the case had exposed a gap in the legislation.
"More immediately I'm very pleased to say that we have found a solution for this particular gentleman and his family.
"[The Ministry of Business, Innovation and Employment] will make an ex gratia payment to him to the equivalent amount that he would have received under paid parental leave."
Lees-Galloway said this was the first time this had happened.
MBIE officials worked incredibly hard to find a "workaround" under the current legislation but it was not possible.
"We will now need to look at the legislation," he said.
Prime Minister Jacinda Ardern said she was so concerned about the case that she personally read through the legislation this morning.
"I think everyone wants to see that support in place and I have to say I was baffled when I read it," she told reporters at Parliament.
"No one would agree that this is a good outcome."
Leader of the Opposition Simon Bridges said he backed the Government's decision to offer the father a grant.
"I don't think I would be critical of her or the Government coming in with money here … for what is a harrowing case," he said.
Bridges did not point blame at anyone, saying small errors popped up in law-making from time to time.
The solution comes after the Government said it was urgently looking at a solution for the man.