Canterbury Regional Council plans to spend $150,000 investigating the risk of a tsunami to Kaikoura.
Canterbury University research shows waves more than 10m high could swamp the coast if there is a landslide in the underwater Kaikoura Canyon.
A working group has been set up to create an awareness campaign for tourist areas and waterfront accommodation providers, as well as an evacuation plan should a tsunami occur.
Hazard analyst Helen Grant says the council will work with the National Institute of Water and Atmospheric Research (NIWA) and GNS Science to get a better understanding of the nature of the seabed off the coast.
She says an area of sediment on top of the underwater canyon poses the most risk if it were to become dislodged in an earthquake, because it is only 500m offshore.
Ms Grant says the research will try to get a better handle on what the risk actually is.
Kaikoura mayor Winston Gray has reassured residents and tourists the town is putting plans in place to evacuate residents in the event of a tsunami.
Mr Gray says work is already underway with Civil Defence on escape routes and gathering points, and will be published as part of the ongoing strategy.
