The government will introduce laws to further regulate vaping and e-cigarettes, including tightening age restrictions, barring advertising, and regulating where they can be sold and used.
"This is the most significant change to New Zealand's smokefree laws since they were introduced 30 years ago," Associate Health Minister Jenny Salesa said.
"The Bill aims to strike the right balance between making sure vaping is available for smokers who want to use it as a quit tool for cigarettes while ensuring vaping products are not marketed or sold to children and young people," Salesa said.
As the Bill is currently written, no vaping products will be able to be sold to people under the age of 18, nor are the products able to be advertised or used in sponsorship.
Vaping will also be banned from smokefree areas, so people would only be able to vape where cigarettes are allowed to be smoked.
Salesa said the Bill will also limit general stores - including dairies and service stations - to selling only three flavours: tobacco, mint and menthol. All other flavours will only be able to be sold at licensed vape stores.
"This is a considered approach that responds to many of the concerns regarding vaping," Salesa said.
"Our government has heard from a large number of smokers who say vaping is helpful for them to be able to quit cancer-causing cigarettes. However we have also heard from parents, teachers and principals who want to make sure vaping companies are stopped from marketing to kids."
Spokesperson for anti-smoking group ASH, Deborah Hart, welcomed the Bill. She said vaping is a lot less harmful than smoking and it helps some people stop.
"It's quite simply the most disruptive influence on smoking in decades. It's challenging the smoke tobacco stranglehold on the nicotine market," she said.
"We have 150,000 to 200,000 people vaping in New Zealand, and the vast majority of them are former smokers or smokers trying to quit."
She said that number ideally should come down over time.
"We don't want people to remain on vapes forever but it's a lot less harmful than smoking. There are some people who have used vaping to quit smoking and now they're not vaping either."
Hart said the Bill strikes a balance between recognising the cessation benefits of vaping and protecting children and young people.
However, she has reservations about vapers who are trying to quit smoking having to share smoking areas in public places, and said that may need to be reviewed in the future.
Vaping Trade Association spokesman Jonathan Devery said he hadn't yet looked into all the details of the new Bill, and expects there will be details he doesn't agree with. But he's happy with what he's seen so far.
"On the face of it I think it's a fantastic first step in legalising, and regulating - and of course legitimising the industry."
Other changes in the Smokefree Environments and Regulated Products (Vaping) Amendment Bill include introducing a product safety system so the Ministry of Health can recall products, and manufacturers and imports must notify products before they can be sold.
The Bill will be introduced to Parliament on Monday, before being read for the first time in March, and then referred to a Select Committee stage where the public is able to make submissions on the Bill. It can then be altered before being returned to Parliament for a second reading.