The anomaly has been picked up by the Queenstown Underwater Observatory's lessee, KJet, while carrying out due diligence ahead of buying the structure, which is attached to a jetty extending from Marine Parade.
KJet director Shaun Kelly said the company had applied for a retrospective consent to ''tidy up'' the anomaly.
''We were just going through our consents and making sure everything was in order, and this came out.''
Although the council had approved the structure when it was built in 1983, it had not deemed a land use consent to be necessary, even after the introduction of the Resource Management Act in 1991.
''It's flown under the radar to some extent.
''I don't think you can say it was anyone's fault, it was just the system, and it's now being tidied up.''
The consent application, prepared by GTodd Law, says the company was granted consent to renovate the observatory in 2000 after it was inundated by floodwaters in 1999.
Therefore, its current design and appearance was granted consent, but the original structure and commercial use had never been approved.
KJet has leased the three level structure since 1998, and runs the attraction 11 hours a day, seven days a week in concert with its jet boat business.
Visitors can watch and feed brown and rainbow trout, while story boards explain the Maori mythological history of Lake Wakatipu.
The company is in the process of buying the observatory from Queenstown couple John and Glenys Taylor.
