Justice Minister Simon Power has told Parliament it is clear the liberalisation of liquor laws in the 1980s and 90s has not worked.
Mr Power was the first speaker during debate on the Alcohol Reform Bill, which passed its first reading in Parliament on Thursday afternoon 114 to 3.
The bill will introduce tighter liquor licensing rules, and a split-age for the purchase of alcohol.
Mr Power says the days of buying beer at the corner diary are coming to an end.
The bill will now be sent to a select committee for public submissions, after a comprehensive review of alcohol laws by the Law Commission.
Under the bill, 18-year-olds would still be able to purchase alcohol at bars and restaurants but would have to wait until they were 20 to buy at supermarkets and other retailers.
MPs will be given a conscience vote on the drinking age, but that would not happen until after the legislation returns to Parliament following public submissions.
The bill also creates tougher rules for parents providing alcohol to young people in their homes and allows for limits to be placed on the alcohol content of ready-mixed drinks.
The Government admits the legislation alone will not turn around the binge-drinking culture, but it says it can help moderate it through controls on availability and a focus on young people.
But Labour MP Lianne Dalziel told Parliament the Government was squandering a once-in-a-lifetime opportunity to tackle in a serious way the harm caused by alcohol in a serious.
Ms Dalziel says the bill does not go far enough.