"We know that there are thousands of other buildings around the country in the same situation. But in this case we were well aware of the chapel's place in the Wanganui community, with the village residents and, of course, the Sisters of St Joseph," he said.
The order ran Sacred Heart College on the site before the school closed, and later sold the property to Ryman Healthcare.
Mr Challies said engineers were asked to come up with a plan to upgrade the chapel without destroying its character.
"They told us it would require significant bracing of the roof, reinforcing the walls and raising the chapel floor," he said.
"It is a dramatic reinforcing of the building, but engineers said it will lift its safety rating to at least 75 per cent, which is well above the 33 per cent required now."
But Mr Challies said the crunch came with costings.
He said the numbers were presented to the board last month, and it was a difficult decision because it was a major financial commitment.
"But no one said no, because Ryman had already made a promise that the chapel would stay."
As well as being the only original chapel attached to any of the company's villages around the country, "it's the only building we own that's more than 20 years old," he said.
Sister Catherine Shelton, representing the Sisters of St Joseph, was at the meeting and said the decision was "a good news story for the city and for the chapel".
"When Ryman purchased the property we did have a handshake agreement the chapel would remain. But we also knew that at some stage they could have pulled it down. We're thrilled they have honoured that commitment," she said.
Ryman has contracted DML Builders of Wanganui to do the earthquake strengthening work and they are expected on site by the end of this month.
The work is expected to be finished within six to eight months.
"Then there'll be more weddings and services to look forward to in the chapel," Mr Challies said.