"On the other hand, the 22ha to be removed from the Ruahine Forest Park has been heavily logged in the past, is partly infested with weeds such as willow and Darwin's barberry and contains a former house site," Mr Sanson said.
The protected status of the 22ha of Ruahine Forest Park has been removed to allow the exchange.
Mr Sanson said the decision followed a thorough and open public process and the careful assessment of the ecological values of both sites.
Under the Conservation Act, proposed land exchanges must result in an overall conservation gain for public conservation land and promote the purposes of the Act.
"I believe this land exchange well and truly meets that test," Mr Sanson said.
The exchange is conditional on the company undertaking extra conservation programmes to help eradicate wilding pines from the exchange land and to restore whio/blue duck habitat.
It is also conditional on the dam project going ahead.
In a separate decision, the company will be required to trap and transfer native fish species present at the dam site.
Forest & Bird said it remained opposed to the land swap.
The conservation group's legal counsel Peter Anderson said there were two critical issues at play.
"Firstly we have the legal issue of whether an area legally protected by the Conservation Act and deemed a Forest Park can be demoted to stewardship land, to allow it to be removed from the Park.
"Secondly, there is the ecological argument that the land already protected and part of Ruahine Forest Park has far greater value than the land it's being replaced with."
Mr Anderson said the 22ha of park land comprised a lowland riverine ecosystem with significant and distinct wetlands, a section of rare braided river, shrublands and forest.
The area contained habitats for threatened species such as long tailed bat, New Zealand falcon, North Island fernbird, red mistletoe and indigenous fish species.
Mr Anderson said the land being exchanged was a poor cousin, with less distinct wetlands and no braided river systems, and was less likely to contain diversity of threatened fish.
"There is no legal justification for the land swap. If it were to proceed we will lose a threatened environment with rare ecosystems and species and be replacing it with land of far lesser ecological value and diversity."
• Full details and maps are available on the DoC website.