The Waitaiki Historic Reserve is situated at the headwaters of the Arahura River on the West Coast of Te Waipounamu.  The Arahura River has been a main source of pounamu to Maori since the settlement of Te Waipounamu more than seven centuries ago.  Prior to the 1860 West Coast purchase, Poutini Ngai Tahu held the customary title and rights to the lands of the West Coast and with the purchase, Poutini Ngai Tahu title to this area was extinguished, except for several reserves.  The Waitangi Tribunal 1991 found that the Crown did not act fairly in its negotiations for the Arahura Block and that the Crown failed to set aside certain areas that Ngai Tahu wished to retain and failed to preserve for Ngai Tahu ownership of Pounamu.  The Crown had formally vested the title of the bed of the Arahura River to the Mawhera Incorporation in 1976.

As a specific settlement negotiated between Ngai Tahu and the Crown under the Ngai Tahu Deed of Settlement 1997, the Waitaiki Historic Reserve was declared a reserve and classified as a historic reserve pursuant to the Reserves Act 1977 and vested in the Mawhera Incorporation under Section 26 of the Reserves Act 1977 with the passing of the Ngai Tahu Claims Settlement Act on 1 October 1998.