Prime Minister John Key said the inquiry would focus on why two buildings the CTV and Pyne Gould office blocks failed to withstand the 6.3-magnitude tremor.

More than 70 language students from Asia died in the CTV building alone.

"So many lives have been lost as a result of the February 22 earthquake that we must find answers, particularly about why such a significant loss of life occurred in two buildings," Key said in a statement.

He said the Royal Commission, chaired by High Court judge Mark Cooper, would also make a broader examination of building standards in Christchurch, where a third of the downtown area and 10,000 homes face demolition after the quake.

"This independent investigation is a vital step in rebuilding public confidence in the future of the Christchurch CBD," he said.

He said the Royal Commission the most powerful investigation available under New Zealand law would present interim findings by September, with a final report due in 12 months.

Key also announced that Australian Prime Minister Julia Gillard would travel to Christchurch for a national memorial service on Friday, which will also be attended by Prince William.

He said Australian Governor General Quentin Bryce and opposition leader Tony Abbott also planned to travel to New Zealand's second largest city for the memorial.

"This is a heart-warming show of solidarity with New Zealand by the leadership of Australia," Key said.

The official death toll from the disaster stood at 166 Monday, although police have said they expect the figure to rise to more than 200.