Christchurch's Anglican cathedral Photo: IC

Heritage groups in New Zealand on Monday welcomed a decision to rebuild Christchurch's Anglican cathedral, six years after it was extensively damaged in a deadly earthquake.

Much of the late 19th century neo-Gothic structure collapsed in the 6.3-magnitude quake that levelled the South Island city's downtown area in February 2011, killing 185 people.

A temporary cathedral made of cardboard was built in 2013 with the derelict one's future hotly debated ever since.

The Anglican Church wanted to tear it down and start anew, saying the restoration cost of more than NZ$100 million ($73 million) was prohibitive.

Heritage groups challenged the decision in court, arguing that the cathedral was an intrinsic part of the city's historical fabric.

After years of legal wrangling, a compromise was announced over the weekend which capped the church's liability in the rebuild.

"People are overjoyed and delighted with the decision," Restore Christchurch Cathedral co-chair Mark Belton told AFP. "From our point of view sanity has been restored."

The church expects rebuilding to take up to a decade, with work scheduled to start before the end of this year.