Government ministers have agreed in principle to introduce plain packaging for tobacco products.
Associate Health Minister Tariana Turia says a final decision will be made after public consultation on the issue later this year .
Bringing New Zealand in line with Australia make sense, Mrs Turia says: there are strong arguments for following Australia in stopping tobacco companies from using the design and appearance of their packaging to promote cigarettes.
Mrs Turia says a separate ban on the open display of cigarette and tobacco packs in all dairies and other shops will take effect in July.
In Australia, a High Court hearing into the validity of the federal government's plain packaging laws for cigarettes and tobacco products concluded on Thursday, with judges reserving their decision, the ABC reports.
British American Tobacco and JT International claim that such laws infringe intellectual property rights, and the case is being watched not only in New Zealand, but also in Britain and Canada.
Barristers for JT International (Japan Tobacco International), British American Tobacco and Philip Morris say the laws set to take effect in Australia later this year will destroy their use of trademarks and destroy a key way for cigarette companies to promote their products.
Two other countries interested
Separately, the ABC reports that two other countries are seeking consultation at the World Trade Organisation on Australia's plain packaging law.
One is major tobacco producer Honduras, the other is Ukraine - a country with no tobacco trade at all with Australia.
But anti-smoking activists told the ABC that Ukraine has powerful tobacco companies capable of influencing the country's government.
A New Zealand lobby group, Action on Smoking and Health (ASH), says plain packaging is the next step to having a smoke-free country.
ASH director Ben Youdan says opinion polls show the public support getting rid of tobacco branding.
"We're one step closer. A similar consultation is happening in the UK at the same time. Australia has started this trend, and New Zealand is just the next domino to topple," he says.
'Significant step' towards 2025 goal
Mrs Turia says the cabinet has agreed in principle "to introduce a plain packaging regime in alignment with Australia".
But she says plain packaging has the potential to make a significant step towards the goal of making New Zealand smokefree by 2025.
"Smoking is the single biggest cause of preventable death and disease in New Zealand, and we must be prepared to take bold steps towards achieving our goal," she says.
Mrs Turia says she is "confident" the Government can launch the scheme while meeting its international commitments "including a major global treaty on tobacco control as well as a range of multilateral, regional and bilateral trade and investment agreements".
Britain's government is also expected to introduce similar laws.