Officers advised the committee that choosing the bylaw option could be legally challenged and came with associated costs.
However, Mayor Len Brown and committee chairman George Wood chose to proceed with the investigation. Brown applauded the decision, saying the council already has the country's most comprehensive smokefree policy and the time has come to take a more proactive and regulatory approach.
Cities around the world are opting for a regulatory approach.
In Australia, several states and territories already have smokefree laws for outdoor dining areas.
While a new bylaw would take some time to develop, it could be the first major outdoor smokefree bylaw in New Zealand and - with a necessary law change - possibly empower the council to issue infringement notices which it currently cannot.