In September last year the Court of Appeal ruled shark cage diving was an offence under the Wildlife Act.
However, Bluff-based Shark Experience appealed this to the Supreme Court, which released its decision today.
The company takes customers to Foveaux Strait and lowers them in cages just below the water's surface close to great white sharks.
Company director Mike Haines said he was "obviously very happy'' about the decision.
"It's been a nervous couple of days since we heard the decision was coming out. We didn't know if we were going to get a decision before Christmas, but obviously we have.''
Since the Court of Appeal decision the company was operating, but without advertising the shark aspect, he said.
"We can go out there and put a cage in the water and go and look at fish, and if a great white shows up that's fantastic.''
He still had a good relationship with the people of Stewart Island, he said.
"It's a small band and whether we're out there or not the great whites still do what they do, they're still there.''
Shark Dive New Zealand, owned by Dunedin man Peter Scott and operating in the same area, was also involved in the High Court and Court of Appeal judgements.
The decision ends a long feud between shark cage diving companies and Stewart Island paua divers.
The legal battle began in the High Court when PauaMAC5 issued proceedings claiming shark cage diving was an offence because it amounted to "hunting or killing'' great white sharks.
PauaMAC5 Inc, which represents commercial pāua quota owners operating in the same area, said there were fears its divers' lives were being put in danger by the operation of shark cage diving businesses.
That court made no formal finding on whether shark cage diving was an offence.
PauaMAC5 took the case to the Court of Appeal.
That court found Shark Experience's use of berley and bait as attractants to bring the sharks to the cage amounted to pursuing them in the same way as bait or a fly to draw a fish to an angler's hook.
In the Supreme Court decision it said the Court of Appeal erred in issuing a declaration that shark cage diving is an offence under the Wildlife Act.
Additional reporting NZ Herald
