The airport, technically known as the Cromwell Racecourse Aerodrome, is at the corner of Ord Rd and State Highway 6, and borders on the Cromwell racecourse.
As part of Wednesday’s council meeting, the council’s waste and property infrastructure committee signed off the plan.
A report to the committee by council property officer Tara Bates said there were an increasing number of inquiries regarding the availability of hangars at the airport.
Crs Shirley Calvert and Victoria Bonham both voted to reject the plan.
All the other councillors, except for Malcolm Topliss and Lynley Claridge, who were absent, voted to approve it.
Cr Calvert said as Cromwell was developing a master plan, the idea should be put on hold.
This was because the master-plan process would look at a "spatial framework" for the town, and plan how growth would be accommodated and provide the right balance of residential, business and industrial activity.
But deputy mayor Neil Gillespie said he did not think the master plan would affect the airport development.
"If there were issues with the airport then I’d get it but there isn’t ... The airport has been there for years ... We can’t stand still."
He said if the master plan decided there was no need for an airport he doubted there would be 28 hangars by the time the master plan was adopted by the council in June next year.
Heliview Flights owner Richard Foale, who operates his business from the aerodrome and is one of the current lessees, said he had "no objection" to the plan.
"People find it ever-increasingly expensive to operate out of Wanaka or Queenstown. There’s an opportunity for a hangar here at less cost."
He also acknowledged it would increase council revenue if it leased out more of the land.
