All children will be immunised against the gastric infection rotavirus from next July.
The announcement was made by Crown drug distribution agency Pharmac today.
Rotavirus mainly affects children. It causes illness and diarrhoea which can require hospital treatment and in severe cases be fatal.
Pharmac medical director Dr John Wyeth said the vaccine would cost an estimated $6.3 million a year and could avoid up to 1200 hospital admissions.