The Government's decision in December to make it legal for drug-checking services to operate at festivals over the summer will be made permanent.
Health Minister Andrew Little says the decision comes after research conducted by Victoria University, on behalf of the Ministry of Health, showed it changed people's drug-taking behaviour.
The Victoria University research shows that 68 percent of surveyed festival-goers who used drug-testing services changed their behaviour.
"It allows voluntary organisations like KnowYourStuff to test drugs at events like music festivals to verify they are what people think they are, without running foul of the law," Little said.
"The Drug Checking Act will expire in December, and experts are telling us it should be made permanent."
Little said new legislation would be passed this year so that drug-testing services are not left in a legal grey-area.
The research found that some disposed of the drugs that had been tested, some reduced the amount of drugs they took, and most - 87 percent - said that as a result of talking to the testing team, they understood more about the harm involved in taking the drugs.
"Testing the drugs has also made it easier for medical staff to treat people who have overdosed, because they know what they're dealing with," Little said.
Testing as a result of the new law has revealed that large quantities of drugs being sold as MDMA, or ecstasy, is actually synthetic cathinones, a dangerous drug known also known as bath salts.
The law change in December was controversial at the time, with National MP Simon Bridges suggesting it could lead to a false sense of security and more drug-taking.
"Parents can't be confident. It's a false confidence because no ecstasy pill is safe - not a single one of them. People respond differently to them," Bridges said in Parliament.
"This is not a moral contest. That's the law of the land. It is illegal in New Zealand, it is a criminal offence to consume and possess class A, B and C drugs as listed in the Misuse of Drugs Act."
But ACT leader David Seymour said it was not about encouraging drug-taking. He said National failed to provide any "robust" evidence to show that allowing drug testing at music festivals would increase harm.
"It does not remove the prohibition on supply and possession of classified illegal drugs. They remain illegal and people who supply, possess and use them remain in the same legal jeopardy which they were under before this legislation came about."
The Victoria University research concluded that drug-checking was recognised by research participants as an important harm reduction intervention that saved lives and kept young people as safe as possible when using illicit drugs.
"Drug use was viewed by the majority of participants as a health issue and that it should be treated as such by supporting harm reduction initiatives such as drug checking," the research says.
Drug-checking at festivals is not new and has been in existence in some countries, such as the Netherlands, since the 1990s.
The international evidence so far about drug checking demonstrates that it does not increase the use of illegal drugs and does not encourage those who don't use illegal drugs to start using them.