Wellington City Council says that if a major quake hits the capital, the impact on the New Zealand economy could be $37 billion.
A report to be presented to the council's strategy and policy committee next Thursday, says the infrastructure and economy could suffer serious damage.
It says the city could be cut off for a considerable time and the Cook Strait communications cable and energy services are particularly vulnerable.
Earthquake resilience programme director Neville Brown says the report aims to point out the size of the threat so the city can prepare.
The Reserve Bank estimates the Christchurch rebuild will cost $20 billion and Mr Brown says it could cost nearly twice that to rebuild Wellington.
The report says strengthening older buildings is a priority and suggests the council could help property owners borrow money to carry out essential works.
Wellington has more than 400 older brick buildings which need to be strengthened.
Developer Rex Nicholls of the Hotel Wellington on Cuba Street says that the council is doing the right thing but he warns that it has to be careful not to overreact.
Mayor Celia Wade-Brown told Morning Report the biggest costs in strengthening buildings lie in those with unreinforced masonry in the central city, such as in Cuba Street.
However, three quarters of the homes checked in one university study had foundations which were degraded or were not fully attached to the building.
Constant upgrades needed - CD
Wellington Civil Defence controller Mike Mendoca says the city has to constantly upgrade its infrastructure to cope with the risk of a major earthquake.
He told Morning Report the recommendations in the report are a sensible approach to the known hazards in the capital, and constant upgrades are needed as more is learnt about the effect of earthquakes.