The government is giving a two year extension to those with learner and restricted drivers licences that are due to expire soon.
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Under current rules, those with a learner or restricted car or motorcycle licences have a five year limit to move on to the next licence stage - otherwise they'll need to pass another theory test to renew their licence.
More than 144,000 drivers' time-limited licences are due to expire in the next two years- 67,000 of those will expire within the next 12 months.
Associate transport Minister Julie Anne Genter said the reprieve gives learner and restricted drivers a little more time to get their full licence, or save up to pay for the test.
"But I want to be clear that people on time-restricted licences need to take the necessary steps as soon as possible to move to a full licence," she said.
Ms Genter said time-limited licences make sense in theory, but it also needed to be acknowledged that people without the resources, training or support to pass the tests risk becoming unlicensed when the time is up.
"This situation points to a larger problem with our licensing system," she said.
Ms Genter said the short-term automatic extension will avoid the risk of young drivers becoming unlicensed and driving outside the law.
"This would be extremely bad from a road safety perspective and could lead to many more young people interacting with the criminal justice system," she said.
Ms Genter said the the situation pointed to a much bigger underlying problem with the licensing system.
"We need to make sure that in two years time this doesn't happen again, for this reason I'm also announcing an immediate review of the driver licensing system, this will take place over the course of next year, with recommendations made to cabinet in early 2021," she said.
Over the next two years the government will be reviewing the Graduated Driver Licensing System, develop additional programmes to help disadvantaged young drivers access licensing and expand driver training in schools.