The Government has confirmed that 5000 Christchurch houses are so severely damaged they are unlikely to be rebuilt for a "considerable" time.
Residents in the areas of Christchurch deemed too damaged to live face a choice about their future, Prime Minister John Key said.
He said the Government would offer to buy out their homes at the value on their rating bill.
People should consult with their banks and insurers over to sell their home, he said.
Christchurch has been zoned into four zones based on the scale of earthquake damage suffered.
Those in the red and orange zones, with severly damaged land and homes, would learn their fate today, Mr Key said.
Other in zones labeled green and white would not learn the future of their homes from today's announcement, he said.
"While I may not be able to answer every question residents have about their future today I do believe we have made significant progress."
Mr Key said Treasury has put the cost of the first two Christchurch quakes at $15 to $20 billion.
That cost is "enormous" when compared to New Zealand GDP, he said.
"But the Government remains firmly committed to rebuilding Christchurch and that commitment remains firm."
Some people will be relieved by today's announcements; others will have had more questions raised than they have had answered. Given the ongoing earthquakes, it's difficult for anyone to have certainty at the moment.
John Key has also announced the setting up of a website by CERA - www.landcheck.org.nz - a website which shows which areas of Christchurch land have been assessed as beyond rebuilding.
Nothing that the government does is ever going to please everyone. We believe however that this afternoon's announcements is going to give red-zone home-owners options, and a degree of certainty; they can now start to consider their future options. The challenge now will be for the government to keep up the momentum to address the concerns of those homeowners in the orange and white zones. At least the money is there, having been appropriated in Budget 2011.
The scale of the Canterbury earthquakes is enormous, and the government estimates that the cost will end up somewhere between 8 and 10% of New Zealand's GDP; a huge financial burden. That's a burden the impact of which will be felt for many years to come. On the other hand, many industries will benefit as Christchurch rebuilds.
As regular commenter Tinman has noted, the majority of Christchurch is still open for business, and life continues pretty much as normal. Let's hope that this is the first step in a process that will see the whole of Christchurch up and running as it was at lights-out on 3 September 2010.