The opposition is squaring off over the government's post-quake steps for Christchurch.

New legislation and a development authority will be introduced this year as the Government changes its oversight of the Christchurch rebuild. The Greater Christchurch Regeneration Bill will be introduced to replace CERA's special powers, but power won't be given back to local authorities just yet.

LISTEN TO FINANCE MINISTER BILL ENGLISH ON KPMG EARLY EDITION ABOVE

Green MP Eugenie Sage isn't happy the government will still be influencing the city's decisions for some years to come.

"The government seems intent on trying top control Christchurch's future from the Beehive," she said. "It needs to release some of its power back to the City Council to have it as the major decision-maker."

But Prime Minister John Key argues there is a need for a transition.

"The government's had a very strong leadership role since the earthquakes and to go from that to absolutely nothing would be far too abrupt," Key said.

Finance Minister Bill English expects it to be a smooth transition.

"There's always going to be a bit of tension, they've got to keep their rates and their debts down so they're keen for us to pay for more of it. We're keen to make sure that they've got some skin in the game."

Christchurch-based New Zealand First MP Denis O'Rourke however supports further government in the city's redevelopment.

"It's absolutely necessary. They city's a long way yet from recovering from the earthquakes. You only have to go down there and look at the state of the infrastructure."

Canterbury Employers Chamber of Commerce CEO Peter Townsend said the promise to focus on commercial areas is positive.

"It was always going to be messy," Townsend said. "It's a huge undertaking there's a lot of money involved."

"Part of the rationale for doing what has been announced is to put much more certainty in those key projects. Much more certainty in terms of investment propositions to enable the central city to move on."

Fletcher Residential will work with the Government on an $800 million East and North Frame residential precinct.

Seven hectares of land will be purchased in total -- between Manchester and Madras Streets.

It will provide space for around 940 new townhouses.