The Waiwera hot pools in north Auckland will be closed for at least most of the summer.
The lease was cancelled last month due to unpaid rent but the managers have indicated they will fight to keep control of the ailing business.
The once-famous tourist destination has been closed since February, apparently for renovations. But nothing's happened and it's now falling into disrepair.
When the lease holder, Waiwera Thermal Resort Limited, was made to hand over the keys for unpaid bills, it challenged the decision to the High Court, which held a brief hearing earlier this week.
However, it can now be revealed that the legal action has been withdrawn and arbitration between the former managers and the property owners will take place in February.
That will mean no waterslides or swims at Waiwera until at least then.
Local businesses that rely on tourists who visit the pools have also told RNZ that Waiwera is a key part of their summer trade.
Waiwera Thermal Resort Limited has owned the lease to use the resort since 2010.
It is owned by California-based diamond tycoon Leon Fingerhut, who earlier this month bought the shares of his business partner, the Russian billionaire Mikhail Khimich.
The property owners, Waiwera Properties Limited, previously said they had expressions of interest by potential new managers for the pools.