The Central Otago District Council's controversial decision to move the library from the school to the council's Ranfurly service centre was made at a closed meeting in February and announced on March 11.
The school board and Maniototo Community Board said they were not consulted and sought a review of the decision.
The joint library has operated from the school site since 2000 and the relocation was to take effect by mid-July.
About 100 people attended a meeting in the library a week after the decision was announced, to show their support for retaining the facility in its current site.
A meeting was held last Friday between three district councillors and school board of trustees representatives.
Deputy mayor Neil Gillespie said it was a ''very productive meeting, with both parties working towards a solution where the library could remain at the school''.
''We are still negotiating the finer details of the arrangement, but we expect to be able to deliver a result that sees the library stay at the school.''
''We appreciate how strongly the Maniototo community feels about the location of its library and feel we are close to an outcome that responds to the community's feedback but that also achieves council's aims to keep the service affordable into the future and align services offered with other district libraries.''
Area school principal Patsy Inder was optimistic of a good outcome.
''I'm confident there will be a long-term sustainable solution that gives everyone what they need,'' she said.
The community had been clear about wanting the best possible facility for the community and backed retaining the library at its current site.
''We are very grateful to the community for their support,'' Ms Inder said.
''People with vision set this library up and we'd like to see more of that vision shown and the same community responsiveness in what happens next.''
