The council's opposition to the $16 million project, expected to create about 100 jobs, attracted a lot of criticism from the public.

Obstacles to a new Countdown supermarket in Palmerston North have been cleared, at last.

Progressive Enterprises and Palmerston North City Council have reached an agreement on the supermarket, and commercial and retail development at Pioneer Highway, Awapuni.

Council planners and Progressive Enterprises had been at loggerheads for two years over the proposed development as the council demanded it fit with design principles. The council's opposition to the $16 million project, expected to create about 100 jobs, attracted a lot of criticism from the public.

Murray Wilson/ Fairfax NZ After years of wrangling, a Countdown supermarket is destined for this site in Awapuni, Palmerston North.

Mayor Grant Smith said he was pleased it had finally got over the line.

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"People city-wide and especially those from the community of Awapuni have been telling us they really want this neighbourhood centre, which includes the Countdown supermarket, to go ahead.

"A way has been found that satisfies the community, the council and Progressive Enterprises. It will provide us with a new amenity and dozens of new local jobs," Smith said.

Progressive Enterprises said it had no comment to make at this stage.

It has been seeking resource consents for the development on 2 hectares of land in the city's local business zone.

Last year, commissioners turned down the company's application after it did not fully comply with the city council's planning rules.

Despite an appeal, court-ordered mediation and attempts by mayor Smith to negotiate a compromise, council planners stood firm in their intention to defend the decision all the way to court.

A hearing on the case began in the Environment Court on Tuesday, but was adjourned to allow the council and Progressive Enterprises time to negotiate.

Council customer services general manager Peter Eathorne said both sides had agreed on changes to the design.

"This will enhance the look of the development from the street front and also provide more open space," Eathorne said.

The new plan was similar to Progressive Enterprises' previous ones, with a Countdown supermarket anchoring the retail development.

The supermarket would measure 2800 square metres, with potential to be extended to 3200sqm – the size of the Kelvin Grove Countdown.

There would be traffic lights at the entrance, car parking in front facing Pioneer Highway, and space for a group of shops

Progressive Enterprises' lawyer Andrew Braggins has previously said once open, the supermarket would be the drawcard for between 14 and 21 commercial and retail tenants, creating a large neighbourhood centre.

Another change from the original plans was the proposed height of the Countdown being reduced from 11 metres to 9 metres in height.

Elizabeth Cowburn, whose Drake St house is next door to the development, was initially concerned the supermarket would throw her property into the shade for large parts of the afternoon.

She had made a submission opposing the development during the initial consents process and was also a party to the Environment Court hearing.

Cowburn said she was satisfied with the outcome – at 9m tall the supermarket would only cast a significant shadow over her property an hour or two before sunset during September.

She said it was a good compromise between the neighbours' concerns and the practical requirements of a supermarket.

"I don't think they could actually lower the height any further.

"I would prefer [the Countdown] further towards the front, but it's a big difference from the original shading to what it is now."