The final hurdle blocking the path of the Waimea Dam has been cleared.

Legislation giving around 10 hectares of conservation land to the $105m dam, has passed its final reading.

The 53m concrete face dam will be built near Nelson, and will be the largest built there for more than 20 years.

Tasman District Mayor Richard Kempthorne told Newstalk ZB's Kate Hawkesby a company was being formed to manage construction.

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He said early next year they'd start clearing vegetation so dam construction could begin.

Nelson MP Nick Smith said the passing of the Tasman District Council (Waimea Water Augmentation Scheme) Bill would solve the region's water woes.

"The Bill passed by 112 – 8 votes and clears the way for a sustainable solution to the region's long standing water problems.

"The passage of this Bill concludes a 17-year tortuous process for developing and gaining approval for a sustainable solution for the regions water problems. This Bill resolves the last issue of access to the conservation and LINZ land.

The dam will store 13 million cubic metres of water in a 87 hectare reservoir.

Smith said the reservoir needed just 9.7 hectares of the 166-thousand-hectare Richmond Forest Park and that this small loss was more than compensated for by the opportunity this scheme presented to restore the health of the Waimea River.

"The Tasman and Nelson regions do not have an overall water shortage problem with less than 2 per cent of the total resource used. This scheme takes a common sense approach by storing some of the massive volumes of water available in winter for release in summer.

The area Waimea Water says will benefit from the Waimea dam. Photo / Supplied
The area Waimea Water says will benefit from the Waimea dam. Photo / Supplied

"The practical dividends of this scheme are a cleaner and healthier Waimea River that can be swum, kayaked and fished in during summer. It means the region will be able to produce thousands of additional tonnes of valuable crops like apples, hops, wine and berryfruit. It means the thousands of additional homes being built on the Waimea plains will have a secure water supply," says Smith.

"This project will enable the Tasman and Nelson regions to be the first to fully comply with the new national standards for minimum river flows and water quality standards that I introduced as Environment Minister under the previous Government. It illustrates that water infrastructure is, alongside tighter regulation, stream planting and fencing, an important part of the solution to New Zealand's national water challenges.

"The $105 million Waimea Water Augmentation Scheme involves construction of a 53m high concrete faced, rockfill dam in the Lee Valley 20km south east of Brightwater. The 5km reservoir will store 13.4 million cubic metres of water to be released during dry periods for irrigation, town water supplies, industry and for maintaining new minimum river flows.

"My disappointment is that this project is the last to receive funding with the new Government cancelling any further financial support for water infrastructure. My hope is that the future success of this Waimea project will help convince future government's water storage can deliver both environmental and economic benefits to regional New Zealand."