Resource consent for a controversial development at Wellington's Shelly Bay has been granted.

The plan for the bay is to build more than 300 homes, a boutique hotel and a village green. It also leaves the door open for an aged-care facility, microbrewery, restaurants, office space and cafes.

The next step in the saga, which has spanned several years, is for city councillors to again vote on whether to lease and sell council land at Shelly Bay.

The proposed development has been in the limelight during the local-body elections with Andy Foster announcing his bid for the mayoralty at Shelly Bay, bankrolled by film-maker Sir Peter Jackson.

The pair found common ground in their concern with dealings over what's considered by many as the jewel in Wellington's crown.

Foster told the Herald he had not yet read the decision, but said that on the face of it the result did not surprise him.

"I would have been delighted had the outcome been slightly different, but I'm not surprised.

"This is the inevitable result of a poor piece of legislation that prevents the community from having a say."

Outgoing mayor Justin Lester said the decision would be difficult for Foster.

"As a political or elected representative it's really important that you respect judicial process, that you take cognisance of the reasons that have been given and the legislation that's in place."

Three independent commissioners have spent months considering resource consent for the controversial development that's been bogged down in legal battles and keyboard wars.

It comes after the Court of Appeal quashed Wellington City Council's decision granting the original resource consent for the significant project.

The court found Wellington City Council made an error of law in its interpretation and application of a section of the Housing Accords Special Housing Areas Act when determining whether to grant the first consent.

Wellington City Council chief executive Kevin Lavery issued a note with the resource consent decision.

He said consent conditions were overall consistent with those imposed when council officers granted the original consent.

"Please also note that we will be coming back to Council with a general update on the decision, including a final decision on the sale and lease of Council land and upgrade of roading infrastructure, in due course", Lavery said.