Aucklanders can breathe a sigh of relief as the Government and Auckland Council have reached an agreement on water infrastructure funding.

The new plan, dubbed "Local Water Done Well," delivers on the Government's election promise to provide a financially sustainable model for Auckland's water services.

This agreement means Aucklanders will avoid the previously proposed water rate hike of a staggering 25.8%. Importantly, local control of water assets will also be retained.

The announcement was made at a joint press conference held at Watercare's Central Interceptor construction site in Māngere.

Prime Minister Christopher Luxon, Local Government Minister Simeon Brown, and Auckland Mayor Wayne Brown were all present.

"This Local Water Done Well solution ensures affordable water rates now and into the future for Aucklanders," stated Minister Brown. He emphasised the significant difference from the previous government's approach, which he described as "wasteful" and "divisive."

The key difference lies in how Watercare will finance its infrastructure upgrades.

The new model allows for increased borrowing spread over a longer period, rather than placing the immediate burden on current ratepayers.

Mayor Brown expressed his satisfaction with the outcome, highlighting the collaborative effort between the Council and central government.

He commended the Government for listening to the Council's preferred approach and praised their swift action in implementing it.

"This is exactly what Auckland needs," said Mayor Brown.

He emphasised the importance of finding a better solution than the previously proposed drastic rate increase.

The Mayor also reiterated his belief that water infrastructure management should involve greater local control.

He commended the Government for acknowledging this perspective and working together to achieve a more sustainable funding model for Auckland's water needs.

International credit rating agency S&P Global Ratings has confirmed that the new model separates Watercare's borrowing from Auckland Council's for credit rating purposes.

This provides further assurance for the long-term financial health of the water infrastructure project.