New Zealand will take 150 refugees from Australian asylum seeker detention centres every year under a new deal agreed in Queenstown on Saturday.
Prime Ministers Julia Gillard and John Key also agreed on new arrangements to combat people-smuggling.
AAP reports the refugees will be processed by offshore detention centres in Nauru and Manus Island.
The refugee intake will be part of New Zealand's annual refugee quota of 750, under its commitment to the United Nations High Commission for Refugees.
"We are limiting this to 150 in order to still maintain a significant commitment to resettling refugees referred by the UNHCR," Mr Key said.
Ms Gillard said the deal could affect asylum seekers currently being held in processing centres on Manus Island and Nauru.
"The aim here is to have it start in 2014 and be ongoing," she said.
She said only people who pass the test any refugee faces will be sent to New Zealand.
Ms Gillard said it will not present an opportunity for people to jump the queue.
The Australian detention centres on Manus Island and Nauru were reopened last year.
Mr Key earlier said it's important that New Zealand helps with "regional solutions" to what he called an "Australasian issue".
Australian critics describe deal as "pointless"
Greens and refugee advocates in Australia say New Zealand's agreement to take 150 refugees from Australian detention centres is "pointless" and will just force more asylum seekers onto boats.
Australian Greens senator Sarah Hanson-Young told reporters in Canberra "this isn't a regional solution; this is a bandaid cover-up for Julia Gillard for what a failure Manus Island and Nauru have been".
"It's not going to save lives, in fact it is going to put more lives at risk.
"More people will be taking dangerous boat journeys as a result of less people being resettled directly (from Malaysia and Indonesia)."
Ms Hanson-Young said instead of resettling refugees from Australia, both countries should instead beef up their ability to assess claims in Malaysia and Indonesia: "and resettle people directly from those places in much larger numbers".
The Refugee Action Coalition said the agreement with New Zealand was "a pointless deal, a regional non-solution".
"Asylum seekers are still going to have to get on boats and get to Australia before they have any hope of protection," spokesman Ian Rintoul said in a statement.
"Rather than offload refugees to another Pacific neighbour, the Gillard government should be upholding its obligation to asylum seekers to protect and process them in Australia."
Opposition immigration spokesman Scott Morrison said the deal with NZ would do nothing to deter people smugglers, or deal with the large number of asylum seekers currently detained in Australia.
"This arrangement of 150 people next year is the equivalent of one or two boats. It's less than 1% of the number of people who turned up last year," Mr Morrison told reporters in Sydney.
"This is an arrangement that barely scratches the surface.
"Julia Gillard just keeps putting sugar on the table for people smugglers and now she is trying to put Kiwi sugar on the table as well."
