The likelihood of new varieties of kiwifruit has increased, with almost $36 million to be spent on plant breeding research in the next seven years.
The Government will contribute $15.2 million and Zespri $20.5 million to the project, aimed at developing at least one new cultivar which could be worth $300 million to the economy.
Plant and Food Research will carry out the research.
Chief operating officer Bruce Campbell says the funding injection will enable it to significantly upscale its breeding programme.
He says while up to $5 million is spent on average pursuing new cultivars, the new approach will be much more intense and therefore more costly.
Mr Campbell says research will focus on areas such as producing fruit yields that are profitable for growers, taste, health, the fruit's storage ability and reducing chemical use.
He says scientists will be able to utilise new technologies enabling them to assess the fruit for desirable qualities.
Mr Campbell says this will help speed up the process of breeding new cultivars, which scientists hope will be reduced from 25 to 10 years.
Zespri chief executive Lain Jager says the funding partnership will enable it to have a greater competitive advantage over nations that compete with New Zealand fruit in the international marketplace.
He says Chile is looking at increasing kiwifruit production by 50% in the next three years and Italy is also planning to increase its production.
Mr Jager says the company is especially interested in developing a new sweet green variety, a red kiwifruit and one with skin which is good to eat.
New Zealand Kiwifruit Growers president Peter Ombler says the investment is a vote of confidence in the face of global competition.