Christchurch had been set to host two quarterfinals and five pool matches but the damage caused by the February 22 earthquake was deemed too great, not only to the 38,000-seat AMI Stadium but to the city's hotels and infrastructure.
After a meeting with International Rugby Board (IRB) officials today Rugby World Cup Minister Murray McCully announced the city had lost the games, six months before the first game was due to kick off.
Though Auckland's Eden Park was the only logical alternative for the quarterfinal games - because of the ground's 60,000-seat capacity and accommodation demands - Rugby New Zealand 2011 chief executive Martin Snedden said work was being done to keep as many pool matches in the South Island as possible.
"Our instinct is today that three of the pool matches for sure will go to the South Island, I think that will probably result in each of the other existing venues around the South Island getting an extra match, but we will tie that down in the next few days."
Dunedin, Invercargill and Nelson are also hosting pool games.
Christchurch Mayor Bob Parker said while he understood the decision, as a Cantabrian he found it hard to take.
"From my heart I will always find this decision hard to accept - perhaps even agree with at some level - but in my head what is important for us all to recognise is that this is an event that is bigger than Christchurch, it is about our country," he said.
"As much as many of us are completely gutted by this, we understand... the decision."
Australian rugby coach Robbie Deans, a Canterbury local whose historic family homestead was wrecked by the September quake, said he was not surprised at the decision.
"The people of Christchurch have more important issues to deal with as they endeavour to rebuild their city and their lives after the recent tragedy."
The Wallabies were to play pool games against Italy on September 11 and Russia on October 1 at the AMI stadium which has a stand named in honour of the Deans family.
"Obviously we would have loved to have played in Christchurch. It's a very hospitable place, the people of Canterbury are very passionate about their rugby, and would have been great hosts."
Mr McCully said existing ticket holders would be offered refunds or tickets to reallocated matches and the Government was discussing a special travel package to help those ticketholders travel to Auckland on an "affordable basis".
Christchurch was to host pool matches Argentina v England, Australia v Italy, England v Georgia, Argentina v Scotland and Australia v Russia.
