Council corporate services executive manager Bernard Murphy said it was below the 5% maximum the council had agreed to in the past.
The Otago Daily Times had previously reported a 4.5% increase but Mr Murphy said on Wednesday the percentage included penalties and other charges that were not normally in the final average calculations.
As the 10-year plan stood, Mr Murphy said over the next 10 years there would be an average annual rates rise of 2.6%.
But this rates rise would be reviewed in the next 10-year plan, to be completed in 2021.
Mayor Tim Cadogan thanked councillors and council staff for their efforts.
"It has been a huge effort. It took significant tolls on people's times and lives."
The council received 478 submissions on the plan, more than ever before and a "great step up" on previous 10-year plans, Mr Murphy said.
The majority of submitters supported the council's preferred options on the large infrastructure projects in the plan, which Mr Murphy said made the process "quite a bit easier for council staff".
Mr Cadogan also said staff should be proud of the "clean sheet" Audit New Zealand had given the council on the plan.
Mr Murphy said the audit went well and although there were some issues, they were not of major significance.
A report by Audit New Zealand on the 10-year plan consultation document said even though the plan was a "quality document", the council needed to reflect on process and capacity issues that resulted in the plan being adopted later than expected.
It also recommended the council consider the causes and need for cash build-ups in later years and the rationale for non-funding of depreciation.
