Telecom has won the major part of the contract to roll out ultra-fast broadband to 75% of New Zealand.
The total cost of the scheme to provide fast internet access is about $3.5 billion and is expected to take eight-and-a-half years to complete.
Communications Minister Steven Joyce says the Government has reached an agreement with Telecom to build a fibre-optic network in Auckland, the eastern and lower North Island and most of the South Island.
Christchurch City Council-owned Enable Networks has won a $440 million contract to build the fibre network Christchurch, Rangiora and surrounding areas.
Enable Networks says the contract will generate thousands of jobs. Acting chief executive Malcolm Campbell says he expects huge growth from the largest telecommunications infrastructure project in the city's history.
Mr Campbell says an extra 50 or 60 jobs will be created within Enable Networks straight away.
"Contracting jobs will produce about 250 by early next year and we would see the economy in Christchurch grow by probably 1400 to 3000 jobs over the next 10 years."
The Government already has partnerships in place with Ultra-fast Broadband Ltd and Northpower Ltd covering the rest of urban New Zealand, while the Rural Broadband Initiative is rolling out faster broadband to rural communities.
As part of the deal, Telecom must separate its network arm, Chorus, from its retail unit into a stand-alone company.
Telecom chief executive Paul Reynolds says the company will lay the first ultra-fast broadband fibre from August, and at the same time will continue the process to demerge Chorus.
Better service for consumers - minister
The Government's goal is to bring ultra-fast broadband to 75% of New Zealanders by 2019. It says the rollout will start immediately with schools, hospitals and 90% of businesses covered by 2015.
Mr Joyce said on Tuesday that consumers nationwide will benefit from the deal, as they will be getting a much better service for the same price or a bit less.
In a statement, Mr Joyce said wholesale household prices will start at $40 or less per month for an entry level product and $60 per month for a 100 megabit per second product, and that there would be no connection charges for households.
The minister believes the deal will open up a range of opportunities, such as high definition video to homes.
Building of the rural broadband begins in July and will see Telecom laying the fibre and Vodafone building new cell sites and upgrading existing ones.
Vodafone's cell towers will link to the fixed fibre network to deliver high speed broadband services wirelessly.
In the first year, Telecom will build 87 kilometres of fibre that will connect 42 schools to broadband in the Auckland region. Vodafone will build 12 new cell sites and upgrade 61 existing sites in the region, over the duration of the rollout.
Both companies are holding meetings, to speak with councils, trusts, local lines companies, local iwi and other Maori entities and other interest groups, before building begins.