New Zealand Cricket (NZC) chief executive Martin Snedden said it was impossible for New Zealand to withdraw from the tour without being hit with a fine of at least $2million as well as compensation for lost revenue.
"It's a fact of life we have no choice, we have to proceed with this tour. The fact is we have a contractual commitment to Zimbabwe cricket and to the other eight Test playing countries," Snedden told a news conference in Christchurch on Friday.
He said he had discussed the tour with other members of the International Cricket Council (ICC) at the annual meeting earlier this week but it was clear its policy would not change to allow the tour to be cancelled.
The government has been pressing the ICC to allow New Zealand to pull out of the tour because of human rights abuses in Zimbabwe. The issue came to a head with the Mugabe government's six-week old campaign to demolish shacks and other unauthorised dwellings, which the UN estimates has left 200,000 homeless.
But New Zealand foreign minister Phil Goff said he accepted NZC's position.
"As I've said on many occasions, they are between a rock and a hard place," Goff said.
"He (Snedden) simply can't bankrupt their organisation and I'm sure he appreciates that the New Zealand government is scarcely going to pay tens of millions of dollars to Zimbabwe for the privilege of not touring their country."
The government has indicated it is likely to refuse visas to Zimbabwe for a return tour to New Zealand scheduled in December. Snedden said this would have a serious effect on NZC's finances.
"The revenues which we would generate from the Zimbabwean tour of New Zealand in December this year and January next year would be about three million dollars," he said.
He added it could also hurt New Zealand's chances of winning the 2011 cricket World Cup in a joint bid with Australia.
"A decision to withdraw the visas of the Zimbabwean team would inevitably severely undermine NZC's ability to be a co- or joint host of that tournament, he said.