Bars and cafes in Wellington are set to have license fees waived for their footpath furniture if they agree to go smokefree.
Wellington mayor Justin Lester campaigned on reducing fees for cafes and bars who had chairs and tables on the footpath.
Fees for cafes on the waterfront can cost up to $20,000, but bars with footpath furniture are from 1 July to get a 50 percent discount on the license - or get it waived altogether if customers are told they cannot smoke on the premises.
Mr Lester said the council was aiming to have Wellington smokefree by 2025.
He said many cafes and bars relied on the outdoor seating, but the fees attracted many complaints and the council wanted to make life easier for those business owners.
It was a big chunk of income to make up by selling coffee, drinks and food.
But having outdoor seating created a greater sense of vibrancy in the city, he said.
"It's great when you see people come out and they're eating and having fun and that encourages other people to come out. It makes the city vibrant and come alive.
"We will still ensure it's licensed and there's pedestrian access so people can get around."
Mr Lester said some establishments were voluntarily already smokefree, including Leeds Street businesses Red Rabbit, Wellington Chocolate Factory, and Pizza Pomodoro.