New building or building expansion would effectively be halted with the land restricted to car parking and gardens.
Council planning manager Richard Simpson said he did not consider the move would be "a big deal".
"Some of them [commercial buildings] have probably reached their economic life anyway and they could probably make some business decisions and relocate.
"We are only talking about a discrete area of Franz Josef."
Mr Simpson said the council had made a "courageous decision" and the public now had the information it needed to make future decisions.
"Nobody's saying get out of here, it's dangerous. There are some longer term decisions to be made."
Mr Fekkes said the town's only petrol station straddled the faultline and that would become an issue if the town had to "dig ourselves out" after an earthquake.
"In the course of a civil defence emergency we would certainly need a fuel dump somewhere, and definitely not there."
Explaining its reasons for establishing the new zone, the council said any building or structure affected by fault rupture was likely to have considerable damage and lives would be at risk.
The Institute of Geological and Nuclear Sciences [GNS] has predicted a 20 per cent chance of an earthquake on the faultline in the next 30 years.
The predicted movement was 8m to 9m horizontally and 1m to 2m vertically.
Mr Fekkes was in the process yesterday of setting up a meeting of the owners of affected buildings and other interested parties.
He expected it would be held next week.
"It would be great if we could just say well let's forget about it ... because the way things were was fine. But that's not going to happen."