Children under 13 years old will ride on public transport free of charge, and some New Zealanders will still get it half price despite the subsidy due to expire next month.
While Kiwis will no longer get the 25c fuel excise duty or road user charge discounts, those aged under 25 will still get 50 percent off their public transport as part of Budget 2023's cost of living package.
It would come at a cost of $327 million for the Government.
Transport Minister Michael Wood said the package would eliminate a "big cost" for New Zealand households.
"Making public transport free for children will make it much easier for kids to get to school and provide relief to household budgets. Free fares for under 13s could save $30 per week for the average household of two children."
But Wood conceded public transport hadn't "always been reliable in the past year".
"Budget 2023 continues our work to deliver a thriving public transport network with more services, drivers and passengers," he said in a statement.
"A dependable public transport network relies on a strong workforce to keep the system moving.
"The Budget enables public transport authorities to raise the base wage rate to $30 per hour for urban bus drivers and $28 for regional bus drivers, introduces split shift allowances of $30 per split shift and introduces penal rates for those working after 9pm."
New Zealanders would be able to access the new public transport discounts from July.
