Ngāi Tahu says Trade Me's decision to ban raw pounamu is "a major breakthrough".
From Tuesday, all current listings of the raw greenstone have been cancelled and restrictions are in place to stop new sales.
Finished pounamu including pendants are still able to be sold.
Ngāi Tahu has long battled against the illegal smuggling and trade of raw pounamu, for which a mother-son duo were prosecuted earlier this year in a landmark case.
"To have New Zealand's largest and most high-profile online trading platform supporting our position sends a strong message to not only their subscribers but to other social media platforms," Poutini (West Coast) Ngāi Tahu Rūnanga co-chair Francois Tumahai told Morning Report.
"The message is: It's not okay to sell illegally sourced pounamu. Full stop."
While some raw pounamu may have been legally sourced, proving so was difficult and Tumahai believed a blanket ban was the most appropriate solution.
"They've taken the best approach. There are mechanisms we can utilise to prove it, but it's long-winded and drawn out, so the best thing they could do is exactly what they have done."
He said the volume of raw pounamu being uncovered was growing, as was the black market.
"What we're finding is with the price of gold now and everybody wanting mining permits on the Tai o Poutini ... Pounamu is getting found more and more often," he said.
"We can't pin it down to tonnages, but we know for a fact what we have recovered is exceeding 60 or 70 thousand tonnes. It's massive."
Tumahai hoped Trade Me's decision would set a precedent for other online marketplaces to follow.
"Our team have reached out to these guys (other marketplaces) but as you can imagine they haven't been forthright in coming forward. Will this announcement help? I'm hoping it will," he said.
"I know Trade Me's our baby here in New Zealand and the others are foreign, but there's still some aspects we can cross over, I hope.
"We'd like to talk to these other platforms and introduce a similar outcome."
