Land associated with the Karamu Takina springs has been returned to Ngāti Kearoa-Ngāti Tuara in a new agreement signed by iwi and Rotorua Lakes Council.
The agreement also established a new partnership approach for managing the stream, which supplies drinking water to Rotorua city.
A ceremony for the signing of the agreement was held at Tarewa Pounamu Marae on Tarewa Rd on Saturday.
Under the new agreement, land associated with the springs and two other pieces of land, specifically Pururu North Reserve tennis courts and land at Tihi-o-tonga will be returned to Ngāti Kearoa-Ngāti Tuara.
Te Rūnanga o Ngāti Kearoa Ngāti Tuara chair Robyn Bargh said the signing was "a momentous day".
"It is 67 years since our hapū leaders agreed to support the community by providing water for the town. However, they didn't agree to their lands being sold.
"Over the following few years, the then-council took parcels of land under the Public Works Act until Council 'owned' over 14 acres (almost 6 hectares).
Bargh said Rotorua Lakes Council have agreed the council didn't need to own the land.
"The Karamu Takina Spring can be co-managed with iwi. This is a wonderful, landmark decision for Rotorua Lakes Council.
"It is fitting the signing ceremony was held at Tarewa as the agreement also includes the return of lands gifted by our kaumatua, Patu Ruhi, in the 1960s for use as the Tarewa Tennis Courts. Council no longer requires these lands, so they are also being returned to the iwi."
Bargh congratulated Rotorua Mayor Steve Chadwick and the Rotorua Lakes Council for their understanding of the importance of co-governance with iwi.
"They have had the courage to make it happen."
Chadwick said the occasion marked the council's formal acknowledgement of past wrongs and went some way to addressing these through a new partnership.
"The not-so-distant history of the forced sale of your lands and then [the] council's failure to meet the obligations of that sale are an uncomfortable truth that had to be acknowledged and addressed."
Chadwick said the new partnership demonstrated the importance of effective and genuine working relationships with mana whenua in order to deliver good outcomes for the benefit of the whole community.