He said Nagaizumi was "definitely reaching out to us" and an indication of that was the expected arrival of at least 50 from that city to the Masters Games in Whanganui in 2019.
Cr Kate Joblin said while the education connections - especially with Nagaizumi - were well known, she wanted to know if there were actual economic benefits for the city beyond that.
Mr Nicholson said there were opportunities "to do it a lot better" but a proper plan was needed.
"We know there are other councils looking to create special business plans for these contacts."
Mayor Hamish McDouall said while hundreds of overseas students had come to Whanganui through the sister city links, there was ample scope to do much more.
And he said there was potential to connect to cities in China: "It's an untapped market and we'll be pursuing that with some vigour in coming months," he said.
Cr David Bennett said if economic development was being considered then any visits to those sister cities would be worth promoting among Whanganui businesses "but we need to be promoting that with those businesses now because they'll be planning their budgets for the next year."
Council decided to set up a sister cities sub-committee, chaired by the mayor along with Cr Hadleigh Reid , some senior council managers, and Noel Irving who had chaired the once active Wanganui Sister City Association.
It will prepare a strategy and bring it back to the council's December meeting.