The government is putting $10.2 million into a seven-year project aimed at raising the skill level of forestry management practices.
The project, to be led by Forest Growers Research Limited, will help the industry upgrade to the latest silviculture technology to better manage the composition, structure, growth and quality of the country's forests.
Forestry Minister Stuart Nash said many of the industry's practices were manual and labour-intensive and needed to be upgraded.
"First and foremost, it's about driving productivity across the forest sector," he told RNZ.
"Secondly, there are some forest health and worker safety implications. If you can mechanise a lot of the work that is dangerous in the forest, then you can not only save lives, but you can increase the health and wellbeing of the workers.
"When people talk about the innovative side of the economy, they don't often talk about things like forestry and farming and this there is a lot of really good work going on in the space, so it's quite exciting."
Nash said the project would focus on developing technology such as automated and digital technology and robotics for tasks like planting, pruning and thinning.
"We need to really up the amount of seedlings that we are producing, that will go into our forests to ensure that we plant enough to sequester the carbon that's required to make climate change obligations, all the way through to planting to silviculture.
"So we may be talking about pruning and thinning, all the way through to harvesting.
"In terms of health and safety, harvesting tends to be the most dangerous job that's done in the forest.
"So if we can mechanise parts of this operation then we can improve the efficiency of forestry, but also protect the health and wellbeing of workers."
Nash said the project could make it more financially viable to recover forest waste that can be used for biofuel, as an alternative to petrol, diesel and coal.
"This could mean that there's a much higher percentage of slash removed from skid site," he said.
"So, the parts of the tree that aren't used are often left on a skid site or on the area where the tree has been harvested.
"If we can find a way to remove a lot of that then there's a lot more fuel available for biofuels are a lot more material available for biofuels. There's a lot of work going on in that space as well."
It is estimated the programme has the potential to deliver $530m of value to the plantation forestry sector over the next by 2035.