Chris Hipkins told Morning Report the data collected from the upgrade would not be collected by government agencies, but would make contact tracing faster, reducing the possible need to escalate alert levels in the event of a community outbreak.
It will be rolled out tomorrow. The smartphone technology will record close contacts, even when the app is closed.
Developed by Apple and Google, the software patch transmits a signal from your phone allowing it to swap 'randomised keys' with other phones, so that both devices record the interaction.
The randomised keys will not include any personal information or location data.
When an app user tests positive for Covid-19, an alert is sent out to people who have a copy of their key on their phone, warning them they're now deemed a close contact.
The Ministry of Health will not know you have received an alert unless you choose to alert staff.
Hipkins said the Privacy Commissioner had approved the roll-out, which he said should provide reassurance to the public that the information would not be misused.
All information remained on the user's phone, he said.
"They own their own data, we are not centrally recording the data. It sits on their phone.
"If someone tests positive and we use the data on their phone to send out notification, it gets sent out to everybody who has the Covid app and then your phone works out whether it's got a matching record so you get the exposure notification."
He said the more people using the Bluetooth technology the faster the contact tracing process, therefore reducing the chances of alert levels needing to be escalated.
"Everybody wants to have a good summer, so let's all do this."
Information the upgrade will provide would give health officials an idea of the level of exposure and possibility of infection, he added.
"One of the things that the phone will do, and the contact-tracing process will decide, is how long someone has been in contact with someone else in order to be at risk and that will partly depend on the circumstances.
"That information will be recorded and how that is used will then becomes a question for the contact tracers."
The technology would be no replacement for using QR codes, Hipkins cautioned, but would add important supplementary information, making the contact tracing system more efficient.
"People still need to use QR codes because Bluetooth technology is anonymised and doesn't record location, whereas your QR code tells you where you've been. It's also been found in the contact tracing that the QR codes have been an important memory-jogger for people.
"Ultimately, we're asking people to sometimes record exactly where they've been and who they've been in contact with up to two weeks ago."