Central North Island iwi Ngati Tuwharetoa has today taken ownership of Crown land valued at just under $53 million.
It covers 8500 hectares of land, which includes 4000 hectares of forests and the Tongariro-Rangipo Prison, which will be leased back to the Corrections Department.
A ceremony was held to mark the occasion on Rongomai Marae near Turangi.
Tuwharetoa Settlement Trust chairman Dylan Tahau said the purchase recognised both the cultural significance of the whenua and provided economic opportunities for future generations.
"There are lots of discussions for Tuwharetoa to have in the coming days," he said.
"Today, we say thank you very much to the Minister. We say thank you very much to the Department of Corrections... We will be talking amongst ourselves to look at opportunities for ourselves but also for future generations, and what can only be a bright and beautiful opportunity presented to us."
Mr Tahau said today was the culmination of work by a number of people over a number of years to see the land returned to Ngati Tuwharetoa.
"It's been an amazing day."
The land sale and purchase is part of the deferred settlement process that was agreed with the Crown in the 2008 Central North Island Treaty Settlement.
Mr Tahau said, with the signing of today's deal, the deferred process effectively now ends.
The handover marks the first time an iwi has taken ownership of a prison.
The Minister of Corrections, Peseta Sam Lotu-liga, who was at today's ceremony, said the sale provided the iwi with resources to assist their economic, social and cultural development.
"It also has benefits for Corrections and the prisoners, who will gain valuable work skills and experience."
He said, as far as the running of the prison went, it would be business as usual.