Negotiations between the Crown and iwi over Whanganui land have reached a "crunchy hard bit", chief Crown negotiator Richard Barker says.
He spoke to Whanganui District Council on Wednesday, saying the Office of Treaty Settlements was active in this area at present.
An agreement in principle between the Whanganui Land Settlement Negotiation Trust and the Crown is expected by mid-2018. A settlement could be agreed a year later.
Mr Barker said the settlement would create a powerful new entity in the district, a post-settlement governance entity, essentially a trust, that would have assets and opportunities.
In the settlement the Crown would hand over cash, Crown property and the rights to purchase further Crown property.
"They will have things that they didn't have before," Mr Barker said.
The new entity would want to partner with council in economic development, social services and conservation.
Mr Barker said some councils had also given land back to their local tribes. Whanganui Mayor Hamish McDouall asked if that could include harbour endowment land.
Mr Barker couldn't predict whether any settlement reached in the next few years would be full and final, but said he wanted future generations to think the negotiating parties had done a fine job, within their capabilities.
The Whanganui Land Settlement Negotiation Trust was mandated to negotiate land claims for the lower Whanganui River in April, with 95 per cent approval by voters. It signed terms of negotiation with the Office of Treaty Settlements in July.
Ken Mair is its chairman, with Tracey Waitokia as project manager.