The Government says public safety has been put at risk by offenders being allowed to carry out their sentence while on electronic bail.
The scheme means people convicted of crimes such as drugs and violence offences can remain at home while wearing an electronic bracelet that sets off an alarm if they leave a designated area.
However, Justice Minister Simon Power says that has put the public at risk as those offenders should be serving time in prison.
"I don't think that using electronic bail for people with a history of violence or involvement with class A drugs is an appropriate use of that bail mode," he said.
He has promised that a review of the system will be carried out this year.
As an opposition MP when the law came into effect, Mr Power was opposed to the scheme and raised concerns that it was only introduced as a way of reducing the prison population.
A start date for a review has not yet been set.
Lawyers are urging caution over the planned review. The president of the Criminal Bar Association, Anthony Rogers, says the Government might find improvements could be made, but he says the system is not a complete failure, and not having people in custody is saving a significant amount of money.
Mr Rogers says electronic bail can also relieve the burden of lengthy court delays.