Napier mayor Bill Dalton said he was pleased to have accepted the "prestigious" award at the LGNZ Conference.
"It just shows you what a city can do when both the elected representatives and the senior staff all work on the same team," he said. "We've got something...rare that councillors and the staff work together so closely in one team, it just has huge benefits".
The award was an endorsement of the council's direction, and that "we've got a positive vision for the city, and we are embarking down that path of fulfilling that vision".
This was echoed by council director city strategy Richard Munneke, who said the award validated their approach in involving the community, businesses, and other agencies to encourage all ideas, and experiment "within a cutting edge urban design framework".
The project created an overarching strategy which set a direction for new development and business ideas following six principles. These would underpin any future decisions made on projects and would guide the council in how it would operate in future.
LGNZ president Lawrence Yule said the project showed an innovative approach to creating a vibrant and liveable city.
"Having been a finalist in the Creative Place category in 2016, and now winning the award, Napier is showing it is leading the way in place-making in New Zealand," the former Hastings mayor said.
Judges for the awards were former Wellington Mayor Kerry Prendergast, chairman of EQC Sir Maarten Wevers and The New Zealand Initiative's executive director, Dr Oliver Hartwich.
They said the City Vision framework was an innovative programme that had the potential to transform the city in the long-term.
"It is aspirational and collectively these projects have the potential to change the nature of the city. The council has involved a reference group and an expert urban designer, and are showing they are open to new ideas and to having new things in different places."