AirAsia X is offering $99 fares from Auckland to the Gold Coast and $249 to Kuala Lumpur to launch its return to New Zealand in two months.
The airline, Southeast Asia's biggest budget carrier, will start the daily services from March 22.
An Airbus A330-300 aircraft will be used on the route with a seating capacity of 377.
Rival airline Air New Zealand is offering fares as low as $179 to the Gold Coast in the week AirAsia launches and Jetstar's fares start at $149, according to the carriers' websites.
The Gold Coast is a favourite holiday destination for New Zealand families.
Malaysian Airlines flies directly to Kuala Lumpur and its cheapest fare that week is $610.
AirAsia X chief executive Benyamin Ismail said New Zealand was "a world class destination that has always had a special place in our heart".
The airline flew to Christchurch from Malaysia but quit the service as demand dropped following the 2011 earthquakes.
Ismail said the airline was excited to be back in New Zealand, allowing an easy connection for our guests from all over Asia to Auckland city.
Similarly, New Zealanders will now have more flight options to Gold Coast as well as access to all the exciting destinations across our extensive flight network in Asia through the Kuala Lumpur hub.
Unusually for a budget airline, AirAsia X offers lie-flat premium cabin seats and these will also be on sale from tomorrow for $299 one-way to Gold Coast or $599 to Kuala Lumpur.
The airline also has a child-free "Quiet Zone" on its A330-300s.
The area is reserved for passengers aged above 12 and comprises the first seven economy class rows immediately after the premium cabin.
Air Asia X says that part of the plane features ambient soft lighting for a more relaxing cabin atmosphere and passengers get served their meals earlier.
Norris Carter, Auckland Airport's general manager - aeronautical commercial, said the new service would boost New Zealand's international visitor numbers, especially for free independent travellers.
It will also mean more affordable travel to Asia for Kiwis, and increased capacity to the Gold Coast.
Air Asia was founded in Malaysia and flies to more than 100 destinations across Asia, Australia and the Middle East.
Since the formation of AirAsia in 2001 and AirAsia X in 2007, the group has carried over 300 million passengers. AirAsia has grown its fleet from just two aircraft to over 173 A320s and AirAsia X operates a fleet of 26 A330-300s.
The group has hit financial headwinds during the past year and plans to raise as much as $1.35 billion to refinance debt and buy airplanes after the fall in the Malaysian ringgit pushed the carrier to a third-quarter net loss.
Its Indonesian offshoot was also rocked by the crash of an A320 plane in the Java Sea late in 2014. All 162 people on board were killed and investigators concluded the crash was caused by the pilots' response to a rudder problem.
Today's announcement comes as Singapore Airlines is tipped to start four-times-a-week services between Wellington, Canberra and Singapore.
Although the airline is not commenting on reports of the service, it is understood an announcement is imminent.