The Crown's fleet of 34 limousines is to be sold through Turners Auctions over the next few months, ahead of replacement cars arriving.
Thirty-four 2011 BMW cars have been ordered to replace the existing three-year-old fleet.
Deputy chief executive of Internal Affairs, Peter Murray, says it decided Turners Auctions was the best option for disposal because it ensures an open and transparent sales process.
He says the department expects higher buyer interest through the auction process and also value for the taxpayer by getting the best return.
The progressive disposal will begin soon and continue to the end of the year as new vehicles are brought into service.
Some of the existing fleet will be held back to provide flexibility during the period of the Rugby World Cup.