The Dunedin Council has voted 10-5 to allow Easter trading for Ed Sheeran's concert next year.
Mayor Dave Cull said the decision was an "exceedingly difficult call to make" and that the ruling will be a 'trial', with a three month review planned to follow the Easter holiday next year.
The 2018 concert falling on Easter Sunday meant the 60,000 expected fans may have had limited options on where to spend their tourist dollars.
The concert coinciding with the public holiday also means bars may struggle to serve the tens of thousands of visitors.
The ruling will affect retail shops but not liquor licensing, meaning bars will still have to go through regular channels to apply for a special license.
Around 60 percent of shops surveyed in preparation for the vote said they would not open anyway. All retail employees are able to refuse to work on Easter Sunday and employers must not compel or treat employees adversely if they refuse to work the holiday.
Mayor Cull said if the council heard of abuses of employee rights, the right to open would be "gone".
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Dunedin Venues Management chief executive Terry Davies told the Otago Daily Times up to 65,000 people were coming to Dunedin for the concert - many for the first time - and they needed to leave with a good impression of the city.
"The city may never have the chance to showcase itself to as large a visiting new audience like this again.''
The alternative, he said, was "60,000 people walking round the streets with nothing to do''.
Unions and Christian groups oppose the change.
"Why should we change everything just to suit that weekend?" First Union organiser Shirley Walthew asked on RNZ. "They won't starve."
Sheeran's latest album ÷ was the most-streamed record of 2017 in New Zealand.