"We've now got some certainty going forward, as well as an acknowledgement that some local government change is necessary to ensure regions like ours can be more effective and efficient in future."
Mr Shepherd said key issues facing Northland which would benefit from a region-wide, shared service approach included roading, water, Civil Defence, sewerage and economic development.
The LGC's backing down from its reform proposal has Whangarei mayor Sheryl Mai saying for the second time in less than a week that "the people have spoken", following that council's referendum result over the former harbour board building.
"This has been an unsettling time for Northlanders, and it's great to have a decision at last," Ms Mai said.
"The way forward will involve a collaborative approach."
Far North mayor John Carter said the decision was "predictable" and reflected a change in central government's thinking. It also recognised that the current elected Northland councils had demonstrated a unity of purpose.
However, at the time the reform was mooted there was genuine concern change was needed, Mr Carter said.
"If the public of the Far North stood up at some time in the future and said we want to go it on our own, I have no doubt that could happen."
The LGC said it will continue to work in the region, "engaging with the community". If that process resulted in new options for reform, the commission would prepare new draft proposals for wider consultation, Ms Preston said.
The man credited with getting the reform ball rolling in 2012, then Far North mayor, Wayne Brown set the review in motion at the invitation of the LGC and its chairman Basil Morrison.
"The only thing I can say in its favour is that the Local Government Commission was consistent in setting and missing every deadline they came up with. They have taken incompetence to the level of art form. I'm sure someone will get a knighthood out of it."
The spokeswoman for a group that organised hundreds of individual submissions opposing the proposal, Jenny Kirk said the decision was a relief.
"We expect they'll eventually come back with another proposal ..." Ms Kirk said.