Trade Minister Tim Groser signed the New Zealand Hong Kong Closer Economic Partnership agreement on Monday, locking in low barriers to trade already in place between the two countries.
Mr Groser says it is a significant achievement that further strengthens the economic links between New Zealand and the Asia-Pacific region.
Hong Kong is this country's eighth largest market and no tariffs exist on goods exported there.
Initial attempts at free trade talks between the two countries broke down eight years ago.
This was due to concerns that goods made in China could be routed through Hong Kong to New Zealand.
New Zealand has since signed a deal with China and negotiations with Hong Kong concluded last November.
New Zealand's trade with Hong Kong is worth more than $800 million annually.
Mr Groser says the deal will help New Zealand secure more deals in the region.
He says companies operating in the Hong Kong market exporting to China will also benefit from the deal.
The Government says the agreement will also serve as a platform for New Zealand business to pursue opportunities in China, which is expected to rebound strongly from the global financial crisis.
Mr Groser says the deal will help New Zealand secure more deals in the region, while companies operating in the Hong Kong market exporting to China will also benefit from the deal.
The countries will begin negotiations on taxation and investment rules in October.
