The National Animal Welfare Advisory Committee wants to know if tail docking is cruel to dogs.
The committee is trying to find out whether docking using rubber bands, currently considered good practice by the New Zealand Kennel Club, causes pain or distress to puppies.
A research budget of $50,000 is being offered to any group that can determine whether the practice is cruel.
The Ministry of Agriculture and Forestry says the study will use puppies already intended to be docked.
Some advocates of tail docking say there is already an Australian study that shows the band method is humane.
Committee chairman Peter O'Hara says he is aware of the research, but further study into docking is still needed.