The news has been welcomed by the parish.
Home Affairs agreed the move and planning permission for the signage was granted this week.
The change comes as Guernsey Police looks to address anti-social behaviour across the island.
The terminus and Church Square have been hot spots for this type of behaviour.
Acting Chief Inspector Tom Marshall said the terminus was an important hub for people wanting to travel.
‘We want to do what we can to support both businesses in the area and regular bus users, and we hope this measure will prevent incidents of public disorder and anti-social behaviour from happening in what should be a community centre,’ he said.
‘We were of course pleased to receive committee support for the implementation of the alcohol-free area.’
Parish constable Zoe Lihou said the parish has been working to tackle a variety of types of anti-social behaviour.
She welcomed the move and said it would be interesting to see how it went.
‘I think it is sensible to review it in October to see whether there were fewer incidents. That’s the only way to do a measure. The proof of the pudding is in the eating.’
Concerns about anti-social behaviour have been raised by the businesses in the area.
Just Games owner Stuart Lean said it might help tackle some of the issues.
‘It will certainly stop them drinking, but there’s not that much drinking on South Esplanade,’ he said.
‘The young people causing problems are too young for alcohol. I will wait and see. The policing [of the alcohol-free zone] will help, as there will be a greater police presence.’
Home Affairs has been working with Health & Social Care to see what additional support can be provided for people who drink regularly in the area.
Home Affairs president Deputy Rob Prow said the committee was always prepared to implement measures which help increase public safety and protect the community from anti-social behaviour.
‘The Town bus terminus is a key junction for many islanders and visitors and forms a pleasant gateway and departure point, with the provision of seating and access to business amenities,’ he said.
‘That said, I also want to stress that we know that making the bus terminus and Church Square alcohol-free zones is not a perfect solution. We also need to try and help people who are drinking regularly in the area, and we are working with HSC and St Peter Port constables on ways in which we can achieve that. The committee will continue to do all that it can to support the police’s efforts.’
The alcohol-free zone will initially be in place until the end of October, and will then be reviewed.