The government is temporarily extending the amount of time people can drive on overseas licenses from 12 to 18 months.
Minister of Transport Simeon Brown said wait times of up to two months were unacceptable - as was a backlog of more than 70,000 people waiting for a practical test.
The previous Labour government was to blame for the delay, he said, for having removed fees for re-sits of tests, which led to increased demand.
The extension would take effect in November and remain in place for two years.
The coalition was aiming for 90 percent of practical tests to be taken within 30 days of booking.
The current average was 35 days for a full licence, and 46 days for a restricted.