Author Nicky Hager, who says New Zealand soldiers are responsible for Afghan civilian deaths, is "over the moon" about a government inquiry into the claims.
Hit & Run, by investigative journalists Nicky Hager and Jon Stephenson, claims six Afghan civilians were killed and 15 injured by New Zealand Special Air Service (SAS) soldiers in 2010.
The deaths and injuries that occurred on Operation Burnham were covered up by the military, the book claimed.
Attorney-General David Parker said yesterday the public needed to have confidence in the New Zealand Defence Force so an inquiry was warranted.
"I want to stress that the commissioning of this inquiry does not mean the government accepts the criticisms of the actions of SAS forces on the ground, although their conduct is squarely within the inquiry's purview and will be thoroughly and independently examined."
Hager said this was "very, very good news".
"New Zealand needed to face up to what had happened during that raid," he said.
"And it had been very disappointing that the last government wasn't prepared to do that and have a proper inquiry - so I'm over the moon actually."
But Mr Parker said there was footage suggesting some people at the village were armed - contradicting a key aspect of the book.
Hager said the Attorney-General was likely shown selective footage.
"Which will probably crumble down to nothing when it is properly inspected."
Hager said he was happy the inquiry would also look into how the SAS handed an insurgent over to Afghanistan's secret police.
"They grabbed him in Kabul where he was staying in a mosque and they took him across town to the secret police, at a time when people all around the world knew that the secret police were torturing people - and the guy was tortured."
It was possible New Zealand had broken international law, he said.
National Party defence spokesperson Mark Mitchell said the inquiry was expensive and unnecessary.
"The way I see it is that we've got our defence force personnel around the world right now operating in environments that are very similar to Afghanistan, and the government has just come out and said, 'well, we're going to run an inquiry because we don't trust what you've told us'."
Defence Minister at the time of the raid, National's Wayne Mapp, said while the SAS had not committed war crimes, the raid was poorly executed so New Zealand deserved answers.
The inquiry has been given $2 million and is expected to take about a year. It will be headed by former Supreme Court judge Sir Terence Arnold and the former Prime Minister Sir Geoffrey Palmer.