Keep Dunedin Beautiful announced plans to create a new artwork in place of the "George Street Cats" mural earlier this year.
The plan led to outrage on social media and prompted Dunedin man Doug Fraser to start a petition, which attracted 1556 signatures.
A new design was announced yesterday and will be integrated into the existing mural, featuring the word Ōtepoti above the mural and extending the mural's framing trees.
Keep Dunedin Beautiful chairwoman Mandy Mayhem said when you looked at the mural, it abruptly stopped, so the group planned to finish off the trees, add details such as birds, extend the sky and add the word "Ōtepoti", which would be filled with drawings from pupils across seven Dunedin primary schools.
She said the community was at the heart of the vision for the mural.
"The overwhelming response showed us how deeply Ōtepoti residents cherish the cats — all sorts of people love it and we want people to love public art.
"We are very proud this has had so much public consultation and collaboration ... I’m hoping this will bring layer upon layer of community good feelings."
The mural was designed by Cornelia Fechner in 1989 and painted by pupils of Otago Girls’ High School.
Mr Fraser created the "Save the ‘George Street Cats’ mural" petition to prevent a "beloved fixture of the Dunedin landscape" from being painted over.
His reaction to the news?
"I'm delighted.
"We seem to have got what I wanted at the very beginning which was a win-win and I think, by the sounds of it, that is what we've got.
"Everyone can walk away happy that the old art is preserved and the new generation of kids have their art added as well."
He would be donating his own money to the project, he said.
"I'd be a bit of a hypocrite if I made this petition and didn't put my money where my mouth is.
"So, I am prepared to put a bit of my own money behind it too."