The trust which runs Yarrow Stadium in New Plymouth says the lives of rugby fans could have been at risk if an earthquake hit during a match.
Yarrow Stadium owner Taranaki Stadium Trust (TST) said reports into the West Stand were commissioned after a November report found the stadium's East Stand was earthquake-prone.
Trustee Mike Nield said the first priority was safety and it couldn't risk having fans sitting in the stadium if an earthquake struck.
"It's a real blow and we apologise to everyone involved. The Trust informed key partners, including the TRFU, of the report's findings yesterday," Mr Nield said.
It was too early to speculate on the future of the stadium, Mr Nield said, but the TST would continue investigating the next steps.
"This is a blow but we remain committed to having a facility in Taranaki capable of hosting top-flight sporting events. We'll be looking at our options and while the loss of Yarrow for 2018 is a setback, it gives us opportunities to look at some of the different choices available to us," Mr Nield said.
He said it was too early to say if the city needed a new stadium in a new location.
Taranaki Rugby Union chief executive Jeremy Parkinson said the announcement about the stadium was a surprise.
"We got summoned to an urgent meeting yesterday afternoon, my chairman and I, and it was a heck of a shock, out of the blue," Mr Parkinson said.
"This has only been brought to our attention in the last 24 hours and we are working towards an alternative venue to cater to all our valued commercial and hospitality partners as well as our long-standing season members."
It appeared that the stadium would now be closed for the foreseeable future and unavailable for the 2018 Mitre 10 Cup, Mr Parkinson said.
New Plymouth District Council manages the 25,000 capacity stadium.
Council chief operating officer Kelvin Wright said it was offering support for its commercial partners at the stadium.
"This is hugely disappointing for players and fans who will be inconvenienced but safety comes first," Mr Wright said.
"We take public and staff safety very seriously and have taken a proactive approach ever since issues were first discovered."
It was not yet clear where the Taranaki Bulls would play their home games.
The Mitre 10 Cup provincial draw was released today and the only home games for Yarrows Taranaki Bulls in it are Ranfurly Shield matches which now must also be in doubt.
It was unclear how much of the stadium's $2 million recovery fund could be recovered, Mr Nield said.
He said the money was approved before the West Stand was tested because of the tight deadline ahead of the provincial rugby season in August.