Telecom and Vodafone have won the contract to provide broadband to rural areas.
The telecommunication companies formed a joint venture to compete for the $285 million government contract to provide broadband to 95% of rural schools and 86% of rural households and businesses.
Telecom and Vodafone say they expect to begin rolling-out rural broadband infrastructure in the middle of this year.
Telecom and Vodafone say they will construct 154 cellphone towers and upgrade 380 existing cell towers to enable fixed wireless broadband to rural customers, as well as improve mobile coverage in those areas.
Telecom will also extend its existing fibre network by more than 3000km and expect to complete the project within six years.
The agreement was reached after two months of negotiations.
Information Technology Minister Steven Joyce said 252,000 rural customers will have access to high speed broadband that compares well to urban levels of service and prices.
Telecom says it expects two-thirds of the 750 schools to be connected with the first year, with speeds of 100 megabits per second.
Rural households will get a minimum of five megabits per second.
The choice of Telecom and Vodafone to build the network has not been without criticism.
Federated Farmers and rival bidders say rural New Zealand will be short-changed.
They argue the fastest way to bridge the urban-rural digital divide is to deploy wireless which requires advanced technology like 4G.