Hawke's Bay Regional Council will not yet sign-off on spending $80 million on the Ruataniwha Dam yet, despite three key conditions being met.
The council discussed the dam at an extraordinary council meeting earlier today.
Dozens of protesters highlighting the dam's environmental impact were also present.
The council said resource consents, confirmation of design and building contracts, and farmer support - had been confirmed.
Council chairman Fenton Wilson said investors still needed to sign-off.
"Everyone needs to be satisfied that any risks have been mitigated to the best of our abilities and that includes environmental outcomes as much as economic.
"There's always a tension between our economy and our environment. Sustainability means an economy that's sustainable as much as a sustainable environment."
Mr Wilson said a final decision would be made in August.
The dam and associated irrigation scheme could irrigate up to 30,000 hectares of farmland in central Hawke's Bay.