New Zealand will restore aid to Cook Islands after a spat that threatened relations between the Polynesian nation and its former colonial power.
In return, Rarotonga has committed NZ will be its "partner of choice" on defence and security matters, effectively ending a dalliance with China.
Cook Islands Prime Minister Mark Brown and New Zealand Foreign Minister Winston Peters announced the restoration of business-as-usual relations on Thursday in Rarotonga.
The pair signed a new defence and security declaration to firm up constitutional ties between the two nations.
The Cook Islands is semi-independent, with its own foreign policy, but remains part of the "Realm" of New Zealand which entrusts its defence to Wellington.
Those lines were blurred when Mr Brown announced a "comprehensive strategic partnership" with China in February 2025.
In return, a blind-sided New Zealand criticised Mr Brown and cut tens of millions of foreign aid,
Mr Peters said that was a "difficult decision" but recent conversations had been "seriously positive".
"It's no secret that our two governments have had a series of serious disagreements," he said.
"(In) Polynesian society, cousins fall out now and again. That's the truth. Our job was to get them back.
"This declaration resolves this former ambiguity and provides clarity to both governments so that we can move forward focused on the future, not the past."
In recent years, China has stepped up efforts to grow its influence in the region, increasing aid, loans and diplomacy, signing bilateral tie-ups and attempting region-wide deals.
The 2025 Cooks-China deal was an economic step-up, including on infrastructure and the contentious extraction of seabed minerals, without explicit security elements.
Asked directly whether China could set up security infrastructure in his country, Mr Brown was categoric.
"No. Our security arrangement that we've signed today with New Zealand means that New Zealand is our first port of call on anything to do with defence and security," he told journalists.
Mr Brown also confirmed he had ditched plans to create a separate Cook Islands passport, which would be a shift from the NZ citizenship currently afforded to the population.
New Zealand ties and the Kiwi passport are treasured by Cook Islanders.
According to the most recent census of both nations, almost 100,000 people in NZ have Cook Islands ethnicity, compared to the 15,000 people living in the Cook Islands.
Mr Brown's moves to embrace China were domestically controversial, given the strong people-to-people links, and drew hundreds to the streets in pro-New Zealand protests.
"We do have a problem when it is risking our sovereignty, risking our relationship with New Zealand," Opposition Leader Tina Browne said in 2025.
Elections are due in the Cook Islands mid-year.
Also this week, global credit rating S&P raised its assessment of the Cook Islands from a BB- to B+, citing "a buoyant economy propelled by strong tourism receipts and the government's fiscal prudence".
Tourism contributes around two-thirds of the nation's gross domestic product.
