Also joining the meeting, with full voting rights, were two members of the Te Tatau o Te Arawa Board, Ana Morrison and Eugene Berryman-Kamp, who both voted to lift the designation.
The decision was met with polite applause from about 20 iwi members sitting in the public gallery.
The road would have run through sensitive Maori land belonging to three Te Arawa hapu - Te Roro o te Rangi, Ngati Uenukukopako and Hurunga te Rangi - almost parallel to Te Ngae Rd closer to Lake Rotorua and had been on the books since 1964.
Hurunga te Rangi representative Peter Staite said he was overcome with emotion and the decision would take time to sink in.
"The colonial government rendered our land useless, putting this designation over our land was second to theft."
Mr Staite said discussions would now have to occur with the various hapu involved as to what they would do with their land in the future.
"We will savour this moment of victory, but we will need to take time to appreciate years and years of oppression, deprivation, struggle and progress. I appreciate those councillors who voted to support the NZTA decision to lift the designation," he said.
Ngati Pikiao representative and Te Arawa kaumatua Fred Whata said his hapu would celebrate with the rest of the iwi and would now like to contribute to talks about the future of Te Ngae Rd and push for more work to be done on Te Ngae Rd past the airport.
"It's about time this matter was sorted out and the result was a good one.
"How this has been dealt with was disappointing for our elders way back in 1964. I hope now we will also be included in consultation for the work they want to do on Te Ngae. We all use that road so that's important," Mr Whata said.
Mark Gould, Mike McVicker and Glenys Searancke voted against lifting the designation.
Mrs Searancke said the decision was premature and would have a profound effect on residents of Lynmore and Owhata.
Mayor Steve Chadwick said it was a significant day.
"We needed to sort the roading corridor issues and we needed to do it in partnership with the community and the hapu.
"I'm glad we are not going to be talking about the REA any longer."