Prime Minister John Key is endorsing Landcorp's bid for the 16 Crafar family farms that are in receivership.
He says the decision by the state-owned farming enterprise to bid for the farms is a sensible move.
The receivers have also accepted an offer from a company linked to a Hong Kong-based company.
Mr Key says the sale is a competitive process and he understands there is at least one other bidder.
Landcorp says its bid may not match the Chinese offer, but it may be more attractive to the receivers because it does not require Overseas Investment Office approval.
The Green Party says current legislation facilitates New Zealand land falling into foreign ownership and the rules need to be tightened. It says Landcorp's bid is a response to public disquiet over foreign ownership of land.
Finance company view
And the head of a farming finance company says the Crafar farms should not be sold to a foreign company.
Don Fraser of Fraser Farm Finance says New Zealand should retain ownership of the farms because there is a world shortage of food and productive land.
If the Chinese bid for the farms is accepted, he says it could open the floodgates of New Zealand land sales to foreign owners.