The Environment Court has allowed the extraction of more than a million cubic metres of gravel from the Shotover River delta.
The work is aimed at easing flooding in the Queenstown area by allowing the Kawarau River, which the Shotover feeds into, to drain Lake Wakatipu more easily.
The Otago Regional Council plans to remove willow-covered islands in the Shotover River as part of the work.
However, construction of an earth wall to divert the river's flow has been delayed.
The Environment Court wants more information about the design of the wall and assurances that it will not have a choking effect upstream on the Kawarau River.