The controversial $1.5 million Lighthouse installation on Auckland's Queen's Wharf has been granted resource consent.
But the planning commissioners said there had been a lack of consultation with iwi over the two-storey wooden state house, which will contain glass chandeliers.
The artwork - by Michael Parekowhai - was commissioned following a gift to the city by real estate firm Barfoot & Thompson and a subsequent $500,000 anonymous donation.
The Council received 34 submissions, with 28 in support, three in opposition and three neutral.
The report granting consent said the proposed artwork was likely to generate a range of personal reactions, but it did not create a "significant adverse visual effect" in resource management terms.
It said the proposal had the potential to contribute to the vitality, vibrancy and culture of Auckland, improving economic and social well-being.
The chandeliers are proposed to replicate the Matariki star cluster and will be lit up permanently so they can be seen during the day or night.
The commissioners recommended further iwi consultation, and said there was "no tangible Maori identity as referred to in that policy and we believe it would be drawing a long bow to suggest that the ahi kaa glow and the Matariki chandeliers meet the Council's requirement."
The commissioners said the reference to ahi kaa, or 'keeping the home fires burning', "compromised the very essence of the traditional Maori values as there will be no people providing a welcome to this structure, the doors and windows will be locked, and the place will be devoid of life inside. Furthermore, a glow in a window at night can signal that a departed lies in state."