An international study involving the University of Otago is expected to change the treatment of premature babies in hospitals worldwide.
The study examined data relating to 5000 babies in New Zealand, Australia and England - half of whom were New Zealand babies born at least 12 weeks premature.
The study began in 2006 and considers the health effects of oxygen levels on the babies.
One of the lead researchers, Brian Darlow of Otago University's Christchurch campus, says premature babies need extra oxygen for several weeks after birth - but up to now the correct amount has been unknown.
He says hospitals have traditionally treated such babies with a lower level of oxygen, but the study shows those given a higher amount have a better outcome.
Dr Darlow says premature babies given more oxygen have a higher rate of survival and are less likely to suffer from vision and neural development problems in later life.
The study's recommendations are expected to be adopted by hospitals worldwide.