The Ruataniwha dam is unlikely to go ahead after the Supreme Court on Thursday upheld an earlier decision that a "land swap" to allow the dam to be built was illegal.
Forest and Bird said this is the end of the Ruataniwha Dam, unless the Government changes the Conservation Act.
At issue was 22 hectares of Ruahine Forest, re-classified by DOC in 2015 as "stewardship land". That land would have been flooded by the dam.
Forest and Bird Advocacy Manager Kevin Hackwell says he's "very pleased".
"The Supreme Court has supported our view that DOC wasn't following its own legislation in removing "specially protected status" from a chunk of land from Ruahine Forest to be part of the dam," he said.
The Court of Appeal earlier ruled that the land swap wasn't legal, but the Minister of Conservation Maggie Barry sought to have that overturned by the Supreme Court. "The Minister of Conservation took this case. It's rather disappointing that she was fighting against her own legislation," Mr Hackwell said. "It's very unlikely they'll be able to go back and try again."
He said it sets an important precedent. "It means a lot of specially protected conservation land in New Zealand, and there are several million hectares of it, is now protected. We've reinforced the fact that it is protected and you can't just, with the stroke of a pen, open it up for development," Mr Hackwell said.
"The law says an area is specially protected and can only be removed from that status if the values for which it was protected have disappeared. We were waiting on several other areas waiting on this decision (including one in Richmond Forest Park and one at Lake Sumner in Canterbury) and this is going to say no to them," Mr Hackwell said.
The legal stoush over the dam has been running for five years. This was the third appeal.
Forest and Bird wouldn't say how much it had spent fighting the dam, but is now permitted to seek costs.
The dam and irrigation scheme was to have been built in the Tukituki catchment. Mr Hackwell says even Hawke's Bay farmers will be sighing with relief. "The dam and the irrigation scheme has been very controversial, a lot of people think it won't be economic, that's why the council has struggled to get people to sign up," he said.
Hawke's Bay Regional Investment Company (HBRIC) would have contributed $80m to the $275m project.
The Chairman of the Hawke's Bay Regional Council, Rex Graham, says he's not surprised at the decision.
He said three councillors are passionately for the dam and three are against, but he's personally pleased about the decision.
"I don't think the government or regional council should be taking conservation land for commercial projects, conservation land is sancrosanct."
The Minister of Conservation Maggie Barry has been contacted for comment.