Some 113,000 investors will pay $2.50 per share for a slice of Mighty River Power.
The Government made the announcement at Parliament on Wednesday night, two days before the state-owned energy company is listed on stock exchanges in New Zealand and Australia.
The Government is selling a 49% stake in the state-owned enterprise and will raise $1.7 billion, giving Mighty River Power a market capitalisation of $3.5 billion.
Ministers met to decide the price and broad allocation of shares on Wednesday afternoon. The price was revealed later in the evening and is at the lower end of the indicative range of between $2.35 and $2.80 per share.
About 440,000 New Zealanders pre-registered their interest, but only 113,000 have bought shares and will get $943 million worth of shares.
New Zealand institutional investors, including KiwiSaver funds, will get $300 million worth of shares (8.6%), while overseas investors will get $472 million of shares (13.5%).
The total New Zealand ownership of the company, which includes the Government retaining its 51% ownership, will be 86.5%.
Finance Minister Bill English on Wednesday night described it an outstanding result and fulfils the Government's commitment of ensuring a majority New Zealand ownership.
Mr English said Mighty River Power would have the largest share register of any New Zealand company on the New Zealand Stock Exchange (NZX).
In April, Labour and the Green parties announced that if elected in 2014, they would set up a single purchaser of electricity which would then pass on savings to consumers.
State Owned Enterprises Minister Tony Ryall said on Wednesday their plans to bring the electricity industry under greater state control are to blame for fewer people actually buying Mighty River shares.
Mr Ryall said Labour and the Greens did their best to damage the offer, which meant hundreds of potential buyers pulled out.
"1783 people chose to do this, representing around $25 million of applications. We can't know for sure, but we can surmise that some New Zealanders were intending to take part in the IPO (initial public offering) and were scared off by the Opposition's interference."
Retail investors will find out how much they have been allocated on Friday and the shares will be listed on the NZX at 12.30pm and on the Australian Securities Exchange (ASX) at 2pm (NZ time).
Mighty River Power chairperson Joan Withers said the final price had been determined solely by the Government.