The Navy is pulling out of underwater mapping work for non-military purposes under new cost-cutting measures.
In a major review of military capability, defence chiefs have been told to find up to $400 million worth of savings to redirect into combat capability.
Among measures outlined in the Defence White Paper, the navy is scrapping one of two ships used for diving, mine counter measures and hydrographic work.
The Navy has been working with Land Information New Zealand doing hydrographic surveying to map the sea floor, but that work will now be rationalised.
Land Information says it will now go to the open market to secure contracts for the surveys it needs to gather official data for navigation safety.
However, the organisations will continue to share data and staff secondments.
NIWA says it has the capacity to take on more underwater mapping work when the Navy pulls out.
General manager for research Rob Murdoch says NIWA already does deep-sea surveying for Land Information and could easily pick up more work.
Mr Murdoch says New Zealand has international obligations to ensure that shipping channels and harbour entrances are appropriately surveyed.