Rotorua MP Todd McClay said the bill was the biggest overhaul to New Zealand's alcohol laws in two decades.
"This is a major piece of legislation which will go a long way in making a real change to New Zealand's drinking culture.
"It will give local communities a greater say on alcohol licensing ... through the development of local liquor strategies."
He said changing the drinking culture was not just about laws.
"It is now up to us as a community to use these new tools to their full potential to put a stop to the incredible harm alcohol does here."
Rotorua District Council regulatory and support services manager Neven Hill said the bill gave local councils the power to set their own regulations around opening hours and the density of liquor stores, but it was too early to say what they would be yet.
"We're going out to the community and the industry and interest groups and saying to them 'what are the five or six burning issues that you would like to see addressed in a policy and what are your thoughts on those issues?'
"We'll be pulling them together over the next six months, and from that we will then formulate our draft local alcohol policy for council to consider."
Justice Minister Judith Collins said the bill struck a sensible balance. It provided tools to help reduce serious alcohol-related harm without penalising people who drank responsibly.
However, the new regulations would not be the full answer.
"Obviously people need to change the culture and their own behaviour."
Opposition MPs have described the bill as toothless, saying it did not address the price, availability or promotion of alcohol, or restrict the sale or alcohol content of RTD (Ready To Drink) beverages - which the Law Commission had singled out as a favourite for binge drinkers and young women.
The industry has been left to draw up its own voluntary code on RTDs, although the Government will be able to restrict the sale of RTDs if no code is forthcoming.
The new law gives local councils the power to set their own rules around alcohol - including setting stricter opening hours or banning bottle shops near schools.
If local authorities did not create their own policies, they would follow new national rules banning bars from opening between 4am and 8am.
The bill also bans the sale of alcohol from convenience stores and restricts the promotion and sale of alcohol in supermarkets.
Another change requires consent from parents or caregivers before alcohol can be given to minors.
The Health Promotion Agency, which took over from the former Alcohol Advisory Council (ALAC), said the new legislation marked a change in direction from the past 20 years of liberalisation.
The agency's spokesman, Dr Andrew Hearn, said the bill would contribute to a reduction in alcohol-related harm by giving communities control over how alcohol was managed in their neighbourhoods.
Most changes will come into effect in a year.
The changes:
Parents or guardians must give consent for minors to drink alcohol.
The alcohol industry to create its own voluntary code on RTDs.
Convenience stores banned from selling beer, wine and spirits, although some allowed to sell other alcohol.
Alcohol displays and promotions limited to a single, non-prominent area in supermarkets.
Councils given power to create local policies on opening hours and ban alcohol outlets near schools.
