A new $85 million Catholic cathedral will be built in the centre of a rebuilding Christchurch after a decision not to rebuild the historic, 113-year-old earthquake-damaged basilica.

The new church will form part of a $500m "community and commercial collaboration" between the Catholic Diocese of Christchurch, Crown regeneration company Ōtākaro Limited, and big city developers the Carter Group.

"North of the Square" has been billed as the largest private multi-site construction undertaken in the central city post-earthquakes, covering two large blocks of high-profile land, which have sat empty since 2011.

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The development, adjacent to Victoria Square, will include a hotel precinct of up to four hotels, a relocated St Mary's Primary School, multi-storey car park building, hub for community activities, church offices and residential accommodation for clergy.

The Catholic Bishop of Christchurch, Paul Martin, said when it became "impractical to rebuild" the old cathedral on the previous site after it was severely damaged in the February 2011 quake, the thought of a new cathedral in the centre of the city became most appealing.

"It is my desire for the cathedral to be in the heart of the city, where our Catholic community can visit on a daily basis to pray and reflect and for the church to be able to play a part in re-energising the life of the city," he said.

The late Bishop Barry Jones set aside $45m from the church's quake insurance claim for a cathedral, and Martin says the "sizeable" funding shortfall would be met through fundraising and the sale of excess property and assets, including potentially selling the old Barbadoes St site.

Martin said while plans were only in their infancy, the cathedral was expected to be able to accommodate up to 1000 people and could be completed by 2025.

The search for potential architects and designs will begin in the new year.