Student Job Search has withdrawn an advertisement seeking young people to test cigarettes.
The Ministry of Health is investigating the legal implications of the ad, which asks students between 19 and 29 to smoke cigarettes and provide feedback.
As well as getting free cigarettes, the students were to be given $50 each at the end of the trial.
Student Job Search chief executive Paul Kennedy says the ad was taken down once he was aware of it.
Mr Kennedy three students responded to the ad before it was withdrawn and they will be spoken to as part of the investigation.
The ministry says the advertisement undermines its aim to make smoking less appealing.
British American Tobacco says the recruitment was conducted by Colmar Brunton and was not in line with its protocols.
It says Colmar Brunton has accepted full responsibility for the breach.