Convert JSON array object to String in Powershell
ConvertFrom-Json may work for you. Here's an example of converting your JSON string to an array of PowerShell objects, then joining the tags for each object with a comma delimiter:
$json = @"[ { "Ack": "no", "Rule": "dont", "Tags": [ "server" ], "Type": "blue" }, { "Ack": "no1", "Rule": "knock", "Tags": [ "yellow", "green" ], "Type": "multiplecolour" }]"@(ConvertFrom-Json -InputObject $json) ` | ForEach-Object { $_.Tags = ($_.Tags -join ","); $_ } ` | ConvertTo-Json ` | Out-File -FilePath new.jsonEDIT: Note (as @mklement0 points out), the parentheses around ConvertFrom-Json are required to force the enumeration of the results as an array of objects through the pipeline.