Contact Energy is to buy the Whirinaki power plant for $33 million.
The Government has been trying to sell the diesel-fired reserve plant, after Meridian decided it did not want it as part of industry-wide asset swaps to boost competition.
Contact expects to take ownership of the plant and four million litres of diesel, at the end of the year.
Contact developed the Whirinaki plant and operated it on behalf of the Government.
Chief executive Dennis Barnes says Contact will consider moving it to Taranaki or south Auckland in the next couple of years.