A deal has been struck between the New Zealand Government, Auckland Council and Emirates Team New Zealand (TNZ), the defending America's Cup champions, to ensure the event is held in the city as planned.

Doubts had surfaced over whether Auckland could remain as hosts of the 36th edition of the famous sailing race amid deadlock over the cost of the base village, where the teams are housed during the event.

TNZ are thought to have proposed a plan to save money at the revamp of Wynyard Point, allowing for an agreement to be reached.

According to reports in the New Zealand media, TNZ's proposal avoids building any extension to Halsey Wharf.

Italian team Circolo della Vela Sicilia will challenge TNZ for the America's Cup crown in four years' time and teams are set to stay at the Hobson Wharf and Wynyard Wharf areas.

"This is a huge relief to have reached the agreement with Government and Council over the event venue and host agreement," TNZ chief executive Grant Dalton said.

"Our determination to have the event in Auckland never wavered despite plenty of challenges right up until the 11th hour.

"It has been a very complex and time-consuming process for everyone so it is pleasing that all parties have seen the collective benefit of the innovative base proposal put forward by Emirates Team New Zealand late last week.

"Excitingly, what we have in the agreements is essentially the start of the event build.

"In saying this, there isn't time to celebrate, the clock has been ticking for the past nine months and there is a huge amount to organise and build in a very tight timeline. 

"But it is a line in the sand where everyone collectively can now focus on working together to deliver the best America's Cup in history and the most successful and inclusive major event New Zealand has ever seen for all New Zealanders."

The 2021 edition of the race will be the third to be held in Auckland.

The city, due to host the 49er and Nacra 17 World Championships in 2019, staged the event in 2000 and again in 2003.