Housing NZ (HNZ) will formally apologise for its "wrong" use of meth testing, which resulted in 800 households being negatively affected.
That could be a total of 2400 people affected, as HNZ said an average of three people live in each tenancy.
HNZ spent $100 million on the mostly unnecessary testing and 'decontamination'.
The report is damning. It says HNZ failed to follow principles of natural justice, and the "policy of zero tolerance" to illegal activity in its homes was wrong.
"We plan to put things right," HNZ said, at the release of its report into the incorrect use of methamphetamine contamination testing.
Affected tenants will be reimbursed, and provided "other forms of assistance", HNZ chief executive Andrew McKenzie said.
HNZ expects payments to "be in the order of $2500 to $3000 per tenancy."
The HNZ report was prompted after the former Prime Minister's Chief Science Advisor Sir Peter Gluckman found health risk of living in a house where meth has previously been smoked is so low that he "can't see the point of testing, full stop".
Housing NZ promises a 'new approach'
Tenancies where drug use has occurred will no longer be terminated, unless there is evidence of drug manufacture.
HNZ, the country's biggest landlord, says in houses where contamination has occured due to drug use, that will now be considered a drug addiction issue and tenants will be helped into rehabilitation services.
No action will be taken where meth is present at levels below 15mcg/100cm2 - the level recommended by the Chief Science Advisor.
Mr McKenzie said it's Housing NZ's goal to "give people in need a warm, dry, safe home".
Paula Bennett was gloating in the media about the eviction of tenants
"On behalf of Housing NZ, we are deeply sorry for the disruption this caused," Mr McKenzie said.
"Housing NZ wants to be a compassionate landlord… it's why we are here," Mr Kenzie said.
The Government's approach was wrong - Twyford
Housing Minister Phil Twyford says there is no evidence third-hand exposure to meth poses a health risk.
Phil Twyford told RadioLIVE’s Morning Talk that Housing New Zealand’s apology is an exercise in government accountability.
“[HNZ] acknowledge in the report that they were wrong to apply a Ministry of Health guideline for testing meth contamination in houses where meth was manufactured, they applied that to all State Houses, and as a result of misapplying that standard more than $100 million was spent needlessly testing and decontaminating houses.”
The Government's approach in 2013 was a "moral and fiscal failure", Mr Twyford said.
Mr Twyford said the people he holds most accountable have "lost their jobs already - they are no longer ministers".
"Paula Bennett was gloating in the media about the eviction of tenants", Mr Twyford said.
“800 tenants lost their homes and had their tenancies terminated, that’s [an] average of three people per household - around two and a half thousand people affected by this.”
Listen to the full interview with Phil Twyford above.
Morning Talk with Mark Sainsbury, 9am - 12pm Weekdays and streaming live on 'rova' channel 9 - available on Android and iPhone.