The New Zealand Government will submit its own proposal for a Marine Protected Area in the Ross Sea, rather than a joint one with the United States.
The proposal would mean the fishing of the toothfish would be banned in the area.
Foreign Affairs Minister Murray McCully on Thursday confirmed the decision, saying New Zealand discussed a joint proposal with the US, but each country will offer a separate proposal for consideration.
Mr McCully said New Zealand's proposal would enable the toothfish fishery to continue in areas outside the Marine Protected Area.
The Antarctic Oceans Alliance says while the US-NZ proposal would have fallen short of what is needed to protect the ecosystem, it would have included important conservation gains and improved on New Zealand's proposal.
The proposal will be submitted to the Commission for the Conservation of Antarctic Marine Living Resources on Friday.
The commission will meet later in September.