A row of shacks on Wildens Way will eventually be demolished and the land turned into an extension of Long Island Reserve, the Murray Bridge council has proposed.
On Monday night, less than two months after pulling out of a deal to sell the land to a private developer, councillors approved a draft plan which would keep it in public hands forever.
The plan calls for the Wildens Way land to be returned to open space when the shack owners' leases expire in 2061.
No new shacks, sheds, jetties, boat ramps or pumps will be able to built there in the meantime, except by the council for community use.
The council will commit to professionally managing the land, carrying out visual inspections, encouraging walking and cycling in the area, and maintaining "the widest possible community access" to the riverfront.
Council staff will come up with a separate plan to improve the swamp area behind the shacks.
Graham Hallandal, one of several locals who campaigned against the proposed sale, said he was glad the land would be protected.
"It's good to see the council has listened to the community," he said.
"The council obviously knows there are extremely strong feelings about that bit of land.
"Short-term income, without looking at the long-term implications, is not what the thinking resident of Murray Bridge wants for their community."
He hoped the council would demonstrate its commitment to opening up the land for public use by tidying up and planting grass on the few vacant blocks on Wildens Way, ready for immediate use - perhaps with volunteers' help.
"There might be people in the community who might want to take a bit of ownership of that land," he said.
"It has got some immediate, great potential without spending lots of money."
The community land management plan was supposed to have been completed in 2007, when councillors voted to designate the Wildens Way precinct as "community land", but council staff never carried out those instructions.
Nobody noticed the oversight until November, when the sale was announced.
Legal advice subsequently led the council to pull out of the deal.
The plan will be released for public consultation in the coming days.