The news has been greeted with delight by local politicians, who have fought the proposal since it was mooted by the state-owned broadcaster.
That response was tempered, however, by the loss of half a camera position.
Last month, the broadcaster began a two-week consultation period on its proposal to cut two Dunedin-based staff.
If the proposal had gone ahead, a reporter and cameraman-editor would have covered a 65,588sq km area in the South.
The move prompted a social media page that included messages from Central Otago Mayor Tony Lepper, Waitaki deputy mayor Hugh Perkins, Invercargill Mayor Tim Shadbolt and Gore Mayor Tracy Hicks, imploring TVNZ not to make the cuts.
Dunedin Mayor Dave Cull said he was concerned about the reduction of television coverage of the South.
But yesterday afternoon Dunedin South Labour MP and broadcasting spokeswoman Clare Curran said TVNZ had ''finally listened to sense'' and shelved the plans.
TVNZ confirmed that.
A spokeswoman said after an extended consultation period with staff, reporting resources would remain unchanged, with one full-time and one part-time reporter, and ''the region's camera resource being aligned to this''.
Ms Curran said the Dunedin office would lose ''half a camera position'', which TVNZ later confirmed.
''There will be 1.5 full-time equivalent camera operators in Dunedin.
''How this is resourced is still being worked through.
''The new structure will not inhibit TVNZ's ability to effectively report on the Otago and Southland regions.
''TVNZ would also like to acknowledge the feedback received from southern New Zealand. We appreciate how passionate you are about what we do in your area.''
On the retention of the reporter's role, Mr Cull said: ''I'm absolutely delighted about that; it retains that coverage.''
He said the loss of hours for a camera position was disappointing.
''While I lament the loss of a position for somebody, a job for somebody down here, it's not as critical as the reporter job.''
Ms Curran said the threatened cuts were against a background of TVNZ announcing a profit of $28illion in August.
That was a $10 million increase on 2014 despite a shrinking market.
''Today's decision reinforces the fact that TVNZ is publicly owned and must give New Zealand's regions a strong voice.''
