Mr Paxton said police identified significant alcohol and disorder issues during the New Year's event of 2015-16.
Young people pre-loaded with alcohol in public places just outside the liquor-free area, leaving police with little ability to take preventative measures to control the consumption of liquor and intoxication.
"This led to incidents of disorder that required significant police resources to monitor and resolve on the night."
Mr Paxton said extending the boundary to Hull Rd and Tweed St would cover key risk areas including the park-and-ride site and Blake Park. There was also a clear delineation point for advertising the liquor-free area and enforcement.
A report to this week's council meeting by the acting manager of strategic and city events Jenna Quay said the bigger zone would also cover the planned extended temporary road closures for New Year's Eve.
Details would be disclosed through the standard process which the council used for temporary road closures.
She said police and the New Year's Eve project team believed that the bigger area would benefit the community and visitors, and support efforts for a safe and successful New Year period.
Residents of the affected streets would be notified by letter, with signs going up throughout the area.
Councillors were told it would not impact on public events within the zone that permitted the consumption of alcohol.