Professor Lothar Stempniewski, of the Karlsruhe Institute for Technology and who developed the technology for Bayer MaterialScience, said the wallpaper made walls more elastic and resistant to cracking.
He said: "Our goal was to give people more time to get out safely into the open in the event of an earthquake.
"Even smaller earthquakes can cause dramatic damage, especially to masonry buildings.
"The degree of destruction depends less on the severity of the earthquake on the Richter scale than on how long the structures are shaken by the destructive energy from below the ground."
The special wallpaper design, which features fibres running in four directions, distributes energy evenly when walls are shaking, making them elastic and resistant to cracking.
The seismic material was tested on a replica house in an earthquake simulator.
"Because of the earthquake wallpaper, we were unable to make the building collapse," researcher Mortiz Urban said.
"In the New Zealand quake in early 2011, a great many walls crumbled and many houses collapsed completely as a result."
The scientist estimated that the wallpaper system could have prevented 60 to 70 per cent of the damage, adding: "Often it doesn't take much to prevent the collapse of a building."
The wallpaper is pasted on using an adhesive with polyurethane beads.
Stefano Pampanin, associate professor in structural design and earthquake engineering at Canterbury University, welcomed the technology, saying it was also being developed in New Zealand.
He said: "It's a good thing. Fibre reinforced polymers (FRP) has been developed quite significantly over the last decade for the retrofit of existing reinforced concrete or masonry buildings.
"Across the world there is an increasingly emphasis on using this sort of new technology. Here in Canterbury we have been testing FRP products and have found that they are a feasible solution for retrofitting buildings, as they are not too invasive."
He said "many lives" could have been saved in Christchurch if this technology had been in place.
The quake wallpaper is expected to go on the commercial market later this year.