The dispute between Auckland Council and the Independent Maori Statutory Board is over after a funding agreement worth $1.76 million.
The board on Wednesday accepted a new improved offer from the council after an original funding proposal in February was cut significantly.
The board is withdrawing legal action which it began against the council following the February budget cut.
The new deal will cost ratepayers $984,000.
In addition, the Auckland Council will provide accommodation, staffing and other support worth an additional $780,000.
The agreement covers the board's first eight months up to July with a process agreed to determine future funding.
The council is required by law to meet the reasonable costs of the board set up to represent Maori in the region.
The council has proposed $1.9 million in cash for the next full year, and similar support in kind is likely to part of that future agreement.
In February, the council agreed to provide $5.4 million over 20 months but then reduced that to $2.9 million, sparking the legal action.