Anti-tobacco lobbyists are applauding a cut to duty-free allowances for tobacco from 200 cigarettes to 50 - or two packs, Radio New Zealand reports.
The change from 1 November will align New Zealand with Australia's allowances.
Associate health minister Tariana Turia said the cut was a further step towards reducing the harm caused by smoking.
Turia said it would reduce avenues for cheaper smoking which are out of step with tax hikes on retail tobacco designed to make New Zealand smokefree by 2025.
Anti-tobacco lobby group Action on Smoking and Health (ASH) had been pushing for a complete ban on duty-free tobacco.
Even so, director Stephanie Erick said, the group was pleased to see a reduction. "With a set of measures it works together to help reduce smoking amongst Pasifika and Maori in New Zealand."
Erick said duty-free tobacco undermined the effectiveness of raising the tax on cigarettes as a way of getting smokers to quit.