Mrs Wells owns and operates Wanaka Swim Academy and was facing being "tossed out" of the town's new Three Parks pool after it opens next month.
A recommendation from an evaluation panel to yesterday's council meeting called for there to be just one learn-to-swim provider at the new pool and - for mainly financial reasons - that it should be the council's own Wanaka Swim School.
However, after some debate, the council rejected the panel's recommendation and opted for a resolution from Mayor Jim Boult.
It voted to instruct staff to prepare a new expression of interest that provided for "dual provision" of a complete learn-to-swim service.
That opens the door for Mrs Wells to put forward a case to use the new pool alongside the council's swim school - in a similar way to the existing arrangement at the Plantation Rd pool.
Mrs Wells watched the debate on a video-link, alongside supporters involved in a 1400-name petition launched earlier this week and Wanaka Community Board members.
She said afterwards she was "humbled" by the support.
Three Wanaka councillors spoke in favour of a dual learn-to-swim arrangement.
Cr Quentin Smith said Wanaka councillors had made a difficult decision about chlorinating water supplies in the face of public opposition.
"We've had to go against ... some community wishes.
"This isn't the case [here].
"No-one dies if we stay with two providers."
He said the council had received 25 letters, the petition had more than 1400 signatures, and there were only 300 users of the swim school.
"It's hard to ignore the community voice."
Cr Craig Ferguson said the driving force behind an earlier council decision to go with one provider at Queenstown's Alpine Aqualand was "dysfunction".
"I don't see that's the case here."
Arrowtown councillor Scott Stevens said the item had been through a full process, which included consultation with the Wanaka Community Board and community and services committee.
He, Cr Val Miller and Cr Tony Hill voted in favour of the evaluation panel's recommendation of a sole provider.
