The Government is spending $27 milllion for two new fully-electric ferries for Auckland, Minister for Energy and Resources Dr Megan Woods revealed on Tuesday.
The new 200 person ferries will operate across all major inner and mid-harbour services and are expected to launch in 2024.
The funding comes from the Infrastructure Reference Group's COVID-19 Response and Recovery Fund.
Woods said the ferries will "dramatically reduce" greenhouse gas emissions, with each electric ferry displacing approximately 1000 tonnes of carbon emissions annually.
"This project will be a major boost to the rapidly developing maritime clean technology sector in New Zealand and will further upskill the maritime transport sector in New Zealand. This is a boost for our climate goals and our economy, which is especially vital as we continue our economic recovery from COVID-19."
She said the Government is committed to supporting low-emission transport options and is investing significantly in electric vehicles, including pledging to decarbonise public buses.
"Electrifying water transport is a natural next step in making public transport cleaner. I'm looking forward to boarding one of Auckland's first electric ferries once they hit the harbour," Woods said.
Climate Change Minister James Shaw said the electric ferries are another important step "on the journey to a low emissions future".
"As a harbour city, getting around by ferry is the norm for many thousands of Aucklanders. Today's announcement means that instead of fossil fuels powering many of those journeys, people will be getting around in ways that help create a climate-friendly, prosperous future for New Zealand," Shaw said.
"Next month's Emissions Reduction Plan will include many more initiatives to cut emissions from transport so that more people across New Zealand have access to low carbon ways of getting around."
The ferries are a collaboration between the Government, Auckland Transport, EV Maritime and boat builders McMullen & Wing.
The Government put $27 million towards the project - approximately 75 percent of the cost of constructing the ferries.
The ferries have a top speed of 25 knots with a range of 40km. They will be owned and operated by Auckland Transport.
