The news - delivered at Mass last weekend - dashes hopes for a $2 million contribution from the Christchurch Catholic Diocese towards re-strengthening and reopening the existing church, which was closed 10 years ago.
Friends of St Mary's (FOSM) spokesman Mike Keenan said the diocese funds would instead be put into the new church, which was planned for the footprint of the recently vacated presbytery.
It follows consultation directed by the diocese on where the parish wanted to be in the next 10 years.
Mr Keenan said it was "disappointing'' that the consultation did not include a buildings option.
FOSM, which paid for a peer review of the initial engineering reports that closed the church after the Canterbury earthquakes in 2010 and 2011, delivered the diocese a 1700-strong petition in July this year in support of reopening the church.
Shortly after that, parish leaders went to Christchurch for a meeting with Bishop Michael Gielen.
A new chapel was confirmed to parishioners at the weekend as the way forward.
An extract from the parish newsletter was shared ahead of that by FOSM, saying to "read between the lines'.
The newsletter said: "This weekend we present to our worshipping community the way we are going to move forward as a community. For some it may be difficult, for some a relief but the true meaning of this lies in our collective efforts to support each other as we carry our cross. Let us not be afraid. Let us be open to one another and listen to each other and support each other.''
The St Mary's Parish Council has been contacted for comment on the plans.
Mr Keenan said he understood the new chapel would take about four years to build.
Bishop Gielen wanted the closed St Mary's to stay on site.
FOSM had been told it could still pursue raising the millions needed to strengthen and reopen the building.
"They had the cheek to tell us that we can go out and fund it, and the parish could lease it back off us for special occasions or funerals.''
Mr Keenan said the direction of a new chapel did not come as a surprise.
"But we were annoyed and angry that we weren't listened to before they made the announcement.''
It also took off the table, a $2 million contribution that could have been used to leverage the rest of the estimated $5 million cost through grants, on top of fundraising.
Mr Keenan said time was running out to engage an engineer for remedial work.
The church was yellow-stickered by the Westland District Council in September 2013 as an earthquake-prone building.
The 10-year deadline expired on Monday this week.
Masses have been held at Seaview Chapel since the doors of St Mary's were closed suddenly due to safety concerns in 2012 by the late Bishop Barry Jones.
The saga of the closed church has now spanned three bishops.
The last of the diocese's engineering reports put the cost of re-entry at $8.7 million, but a peer review paid for by FOSM whittled that down to $5.1 million.
In February, the parish council announced it was backing an estimated $2 million rebuild of St Mary's Primary School, which will see the existing presbytery demolished to make way for the school development.
The proposal was not expected to take effect until stage 2 of the works in 2026.
The Christchurch Catholic Diocese lodged consents in October to develop and modernise the school, with a new classroom block, landscaping and signs proposed at the Sewell St entrance.
- By Janna Sherman of the Hokitika Guardian
