Under the Act the position becomes vacant immediately when any ineligibility is discovered and unless it is less than 12 months before the next election, a by-election must be held.
Mayor Garry Howard said in a statement: "This is most regrettable and not something I would like to see happen to anybody that is giving their time to serve the community".
"However, council must comply with the Act and council's electoral officer has a duty to act to follow the legal process.
"I have encouraged Martin to get his citizenship and to stand again. There is an expense to a by-election, but it is not legally possible to hold a position and await citizenship."
When he announced he was running in the election last year,Hill said he had lived in Buller for a decade.
It was not clear today how his ineligibility had come to light. It is understood he is English.
- Greymouth Star