The ban will start in Jan. 2014 for multi-state restaurant chains and then the following year for everyone else.
San Jose Mayor Chuck Reed voted with the majority.
"It's a step toward zero waste which is one of our long-term goals and it's good for the environment as well," said Reed.
Pete Constant was one of two councilmembers who voted no.
"We finally have the signs of an economy that's starting to rebound and we're putting yet another government burden on them," said Constant.
Most of the restaurant owners we spoke with, object to the ban on polystyrene in foodware. Robert Samuel, who owns Robee's Falafel, calls it government meddling gone wild.
"I know they're trying to help keep the planet green and everything, but they got to do it where they help us as well as businessmen, said Samuel.
"Recycled products will go up. Cost more than regular Styrofoam," said Victor Le, a restaurant owner.
Le is one of the ban's critics. He runs a Vietnamese restaurant called On A Roll. Le objects to the ban, mostly because of the cost of converting to non-foam alternatives, such as paper or rigid plastic containers.
San Jose has been studying a ban on foam containers for years. They claim that cutting out polystyrene actually saves money by reducing the amount of trash and thus, restaurant garbage collection rates.
Environmentalists say Styrofoam foodware doesn't break down easily and banning them would improve water quality in streams and in the bay.
Joey Camacho runs the Konjoe Burger Bar and says they use the more costly paper containers, but says it's worth it. He told us, "It's a cost that business should kind of bear. I think it's part of our social responsibility to just be more environmentally aware what we're doing."
Small mom and pop restaurants will get a break. Those that make under $300,000 a year will be exempt from the ordinance.