The National Emergency Management Agency will be paid $40,000 after court action over the Whakaari / White Island eruption was dropped.
NEMA had faced a WorkSafe charge of breaching the Health and Safety at Work Act, but this was dismissed by Judge Evangelos Thomas last year.
This afternoon, a new decision released to media stated the agency faced "significant" costs fighting the charge and preparing for a possible trial, that had been met by its insurer.
WorkSafe will now cover these costs.
Twelve other parties facing Whakaari health and safety charges will go to trial in July, including tourism companies, Crown Research Institute GNS Science and the island's owners.
Judge Thomas' decision also said this afternoon: "When WorkSafe first began talking to NEMA during the investigation, it stressed to it that it would not be charged. That WorkSafe did not consider NEMA was caught by the Health and Safety at Work Act 2015. NEMA at all times cooperated with the investigation. It too did not consider that it was caught by the Act."
He said: "Just days before the 12-month charging period expired, WorkSafe advised NEMA that it had reconsidered its position. That it now considered NEMA was caught by the Act and asking for NEMA's response. NEMA immediately responded, setting out why it disagreed. That did not convince WorkSafe."
The decision also noted: "WorkSafe had, and was entitled to take, a contrary view of what was a live issue. It was entitled to debate internally at WorkSafe whether NEMA would be caught or whether it would not be caught; whether NEMA should be charged or whether it should not be.
"There is a high public interest in ensuring those who might be liable were charged. There is a high public interest too in ensuring that prosecuting agencies do not become impotent because they fear a costs award."