Cairn Wood and Ballysallagh Upper Reservoir and Forest in Co Down has been taken off the market after the public raised concerns over the sale.
It will now be retained in public ownership under the Forest Service and Ards and North Down Council has agreed to look at alternative options to manage the area.
Alliance Councillor Andrew Muir said he is greatly encouraged Cairn Wood has a bright future.
Mr Muir said: "Clearly Cairn Wood has much to offer the Borough in terms of economic and social benefits. For that reason it is important that all users, especially groups who have been active in securing it in public ownership and others such as anglers using the Reservoir, are fully involved in the discussions that will lead to development of the plan for its future. Through involving a wide range of interests we will maximise the opportunities for this beautiful area. I was disappointed a small number of DUP and Ulster Unionist Councillors voted against this vital next step, but I will continue to campaign until we finally secure the long term future of Cairn Wood."
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