Traditional approaches of planner-led technical decision making and process-led legal decision making in relation to addressing development impacts on ecological systems have been found to be inadequate when the sustainability limits are reached either in relation to providing resources for development or accommodating the adverse effects on ecosystems from development.This paper sets out an approach of nested adaptive systems as the basis for governing and managing the integration of socio-economic systems with biophysical systems to reconcile development and ecosystem integrity.The approach was applied to the development of the Canterbury Water Management Strategy. Rapid expansion of irrigation to convert dryland farms to dairying has led to the sustainability limits being reached for water availability, and, for the cumulative effects of land use intensification on water quality and freshwater ecology. Traditional approaches to water management had failed to address this issue. A paradigm shift to systems thinking incorporating collaborative governance was fundamental to achieving a strategy supported by all stakeholders.In the implementation of the strategy, it has also been demonstrated that managing limits is insufficient. Rather, as a future development, a management approach based on nested adaptive systems incorporating collaborative governance is needed.