The government will spend $2 million on reducing the high number of unexpected deaths in infancy, providing wahakura - baby baskets also known as pēpi pods - and helping pregnant women quit smoking.
Between 40 and 50 babies die each year in New Zealand from Sudden Unexpected Death in Infancy (SUDI), with more than half of those accidentally suffocated by their parents while sleeping in the same bed.
Māori babies die from SUDI at twice the rate of non-Māori.
Announcing the funding, Health Minister Jonathan Coleman set an ambitious target to reduce the overall rate of SUDI by 86 percent by 2025, a reduction from 44 to six deaths per year.
Dr Coleman said the money would go towards a nationwide rollout of the woven flax or plastic pods, which allow babies to safely bed-share with their parents.
"The key thing is that all families deemed at risk of bed sharing will have some sort of safe sleep device," he said.
A number of district health boards currently offer woven flax wahakura or plastic baby pods, and Dr Coleman did not expect that to change.
"That would be my expectation, that there is a range of options funded, and in the end what we want to do is what is effective for the families."
The funding would also go towards helping pregnant women quit smoking, which research has shown is another major risk factor for SUDI because it weakens babies' lungs.
Kathrine Clarke of the Whakawhetū Māori SUDI prevention group welcomed the new target to reduce the Māori rate by 94 percent.
"I think it is about time. I think it should be 100 percent," she said.
"I just think it is fantastic that there is new investment into the health of Māori women and babies."
At the moment, only low-income Māori parents who smoke can qualify for a free sleeping pod.
Whanganui mother of three Jennie McLachlan said she had wanted to share her bed with her newborn daughter to keep a closer eye on her.
However, she did not qualify for a free pēpi pod from the hospital, so had to buy one second-hand.
"I used to be quite panicky," she said.
"I used to literally spoon my wahakura and it was just like cuddling my baby, although my baby was in its own safe little environment.
"It made me sleep better, and probably her as well."
She wished she'd had one for her older daughters too.
"When you have got a new one, you are kind of getting up during the night thinking, 'Oh my god, are they still breathing, are they alright?'"
Dr Coleman said the safest thing for babies was to sleep in their own cot or bassinet, but that would not be an option for some families.
"This money is going to fund what is popularly known as a pēpi pod for every family who is deemed to need it," he said.
"It could be between 4000 to 8000 of the 60,000 babies born in New Zealand each year," he said.
Auckland University professor of paediatrics Ed Mitchell said new research showed that if a baby was exposed to smoking and bed sharing, the risk of SUDI was 32 times that of not being exposed to either.
"It is actually the combination of the two that is the most deadly," he said.
"It is about breaking the link between the two; tackling both smoking and bed sharing is important."