Current methods used to determine Coastal setback lines have several limitations. Furthermore, the historical practice of defining setback lines based on a single deterministic estimate is also proving inadequate with the emergence of risk management style coastal planning frameworks which require probabilistic estimates of coastal recession. This paper describes an innovative approach for the determination of the economically optimal coastal setback line which combines an economic risk model and a process based, probabilistic coastal setback line model. It is anticipated that this new approach is highly suitable to provide vital information for risk informed coastal zone management.