"I'm sure that all the locals will be relieved but at the same time it is the most sensible decision."
Mrs Dunn is also a member of Friends of Mauriceville, a group formed in 2008 to preserve the area's Scandinavian heritage.
In May, Fran Wilde, chairwoman of the leadership team, assured the group that the historic Lutheran church and cemetery would not be impacted but use of the site couldn't be ruled out.
Mrs Dunn said the majority of residents had been against the idea and she hoped that had had an influence on the decision not to use Mauriceville West for the project.
Ms Wilde said they had never intended to compromise the cemetery.
She said there were a number of reasons Mauriceville West wasn't chosen.
"When we did more work on the site, the topography wasn't suitable."
After looking at the distance needed between the possible lake and the cemetery, the investigation found the volume of the lake would be too low and not cost-effective.
The group has now whittled the list of possible sites down to five, from 243 identified when the project began.
Yesterday, Ms Wilde announced White Rock, Mangatarere, Black Creek, Te Mara and Tividale had been chosen for further investigation.
A full feasibility study on the five sites will be done in 2015. Construction is proposed three years after that.
"The project is still at a conceptual stage and we don't yet know how many schemes might be viable - there may be one or a combination of several," said Ms Wilde.
The scheme will collect and store water, and distribute it for a range of economic and community uses during the dry season.
There was the potential to increase irrigation in the Wairarapa valley from 12,000ha to about 42,000ha.
Ms Wilde said the project wasn't just about availability but reliability.
"Basically it's an act of God, we are totally reliant on weather conditions.
"It's about better use of water."
Irrigation would diversify production in agriculture and horticulture, she said.
The project team said it had the support of many farming interest groups, primary industry groups and landowners.
Ms Wilde said landowners had been directly contacted and would be the first to receive information.
There was a mix of 55 farm and lifestyle block owners on the five sites that could be directly affected.
Roads might have to be removed or realigned, such as White Rock Rd.
Ms Wilde said the environment was hugely important to the project.
"We are not going to destroy or damage our environment."
She said it was an expensive project and possible changes to local government bodies could make it tough to fund.
"It will be a matter of cost, the resource consent itself is massive."
Wairarapa had a small population and if the region was split, one area wouldn't fund another just for its own benefit, she said.
"If there's a split in the region, that will be up to the new council what it will want to do."
The final number and location of storage lakes will depend on environmental factors, demand, social factors, cost, land availability and the volume of water.
Community drop-in days in each of the five site areas in October would allow members of the public to meet with project staff, ask questions and give feedback.
Project investigations are being jointly funded by the Greater Wellington Regional Council and the Ministry for Primary Industries' Irrigation Acceleration Fund.
