The Tauranga City Council commission will stay in place until July 2024, another 21 months longer than originally intended.
Local Government Minister Nanaia Mahuta made the announcement in Tauranga this morning, saying it would ensure the council had the stability needed to maintain pace.
Mahuta said the current commission would end its term in October and she would consider candidates for the next commission.
"I have taken on board the commission's exit plan and recommendations and carefully considered all available options. It became clear that the council is still facing significant challenges and it was going to be necessary to continue to have a Commission at the Council to advance the progress already made," Mahuta said.
"My intention is for a smooth transition back to elected representation for Tauranga in July 2024 with elections to bring in new councillors and a new mayor."
Four commissioners took over in February last year, after the elected councillors were sacked in December 2020.
It followed the shock resignation of mayor Tenby Powell in a fiery speech that criticised councillors as small thinkers and petty politicians who only blocked progress.
Extension of the commission was widely expected, with Chamber of Commerce chief executive Matt Cowley saying it would give space for a rethink for a city in crisis.
However, some have been staunchly opposed to the move, saying it undermined democracy.
Mahuta thanked the current commissioners and acknowledged chair Anne Tolley, a former National minister.
"The current Tauranga commissioners have accomplished some impressive achievements in their tenure including strengthening relationships with the community, producing a long-term plan for 2021-31, and improving culture within the council," she said.
"They have worked effectively to understand the needs of the Tauranga and what is required to deliver significant and necessary change to a rapidly growing city."