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The former contaminated Fruitgrowers Chemical Company site in Mapua, 30km west of Nelson, is now safe for the public.
An independent report released today showed the soil is suitable for intended land uses with reasonable site management, Parliamentary Commissioner for the Environment Jan Wright said.
Further monitoring of the groundwater was needed.
The report was not intended to address questions about air quality or health, Dr Wright said.
The report gave Dr Wright "confidence that the once contaminated site can now be used by local residents".
"This is good news for the people of Mapua and the wider Tasman District."
Environment Minister Nick Smith said the report confirmed that after two decades of debate and disruption and $12 million of work, the site was safe and fit for purpose.
"This land is not perfect and never will be but it is a vast improvement from being the worst contaminated site in the country," Dr Smith said.
The clean-up of the site was a "steep learning curve" and changes have been made to the way similar sites would be handled, he said.
The Environment Ministry would fully implement all the report's recommendations, including a further $455,000 to meet the on-going monitoring requirements.
A health report on the impacts of the site was yet to be completed, but Dr Smith said he hoped to have it by the end of August.
"The most important lesson from Mapua is that prevention is always better than the cure.
"Now and in the future we must take a far more cautious approach to the management of dangerous chemicals."