The decision is a blow for one panel member, councillor Alf Filipaina, who campaigned for change.
The Counties-Manukau police Pacific liaison officer said he remembered being called to Mangere Bridge when Mr So'saia Paasi and his 7-year-old-son Tio drowned. Three other children were rescued from the cold, swirling current.
"I have no doubt that had they been wearing lifejackets they would not have drowned," Mr Filipaina said.
"If making it compulsory saved one, two or three lives, it would be worth it."
He believed the way to save lives was to take responsibility away from skippers and give a clear simple message: lifejackets are compulsory.
He said not all people who loved to go out on the water and fish were in boating clubs and knew the sea well.
"How do you explain to our community? Yes, you have to wear them but the captain chooses the circumstances. That is not a clear-cut message," Mr Filipaina said.
The change, affecting boats of 6m or less, will go to before council for approval with the aim of bringing it into effect from November.
Councillor Calum Penrose, who chaired the panel which yesterday voted three to two for the change, said the first year's focus would be on education and preparing clear signage at boat ramps.
About 85 per cent of the 35 submissions heard opposed compulsion and restriction on skippers deciding.
A spokesman for opposing boating groups, Mike Cahill, said the hearing panel ought to be congratulated.
"This is a common sense solution that allows for skipper's discretion over wearing lifejackets at times of low risk.
"This is consistent with the likely safety rules being reviewed by the National Small Boat Safety Forum which advises the Government."
Mr Penrose said he was troubled by how a compulsory rule could be enforced by the Auckland Harbourmaster and his deputy in the way police could with seat belts on land.
The council would now take up the boating clubs' offer to help with water safety education and would ensure there was clear signage at boat ramps, such as Kawakawa Bay in southeast Auckland.
WaterSafe Auckland chief executive Jonny Gritt said the change was a step in the right direction.
"Drowning rates have reduced but the changing face of Auckland is something we have to be conscious of," he said.
WaterSafe Auckland had taken a lifejacket use programme into 25 community hubs and was promoting the safety message in workplaces.
Coastguard Northern Region said the recommendation underlined its view that it is the skipper's responsibility to ensure the safety and wellbeing of all on board.
The Waikato Regional Council brought in a bylaw to make wearing lifejackets compulsory in 6m and under craft last summer.