Tauranga principals say an $8 million cash injection to make NCEA examinations available online could give students more control of their learning.
However, there were concerns online testing could become a barrier to what was already a stressful experience for students.
Education Minister Chris Hipkins announced the government would invest $8m to allow the New Zealand Qualifications Authority to continue building the systems needed to offer NCEA exams online by 2020.
"Online exams are increasingly popular in schools, are more efficient to administer and make assessment data more readily available for analysis," he said.
NZQA would deliver more than 30 digital examinations in 2019 as part of its research.
The NZQA 2017 Digital Trials and Pilots evaluation found nearly 100 per cent of students preferred doing an online examination rather than written examinations.
Digital assessment transformation deputy chief executive Andrea Gray said the aim was to have NCEA exams online, but NZQA would continue offering a paper-based exam system short-term for schools that were still transitioning to digital education.
Gray said online exams would take place in a school setting and follow the same "robust end-to-end processes" that paper-based exams did.
"The main difference will be that students will interact with an online examination on a digital device," she said.
Ōtūmoetai College principal Russell Gordon supported the idea but was concerned about the timeframe.
"If this is to be implemented in 2020 ... we need to look at the bigger picture and prepare our young ones adequately."
Gordon said there were benefits to allowing students to complete the exam in a school setting when they felt adequately prepared.
"The goal is to personalise education," he said. "Having students sitting their exams when they believe they are ready allows them the freedom to follow the academic pathway that best suits them."
However, Gordon raised concerns regarding funding for computers if hundreds of students had to complete the exams at the same time.
"The school does not have 470 computers for students to sit their exam at the same time," he said.
Mount Maunganui College principal Alastair Sinton said carefully managed online examinations would give students and teachers greater flexibility and control over the pace of learning.
Sinton said teachers were aware some students were ready to be assessed externally earlier in the year or at a different NCEA level.
"The constraints of time and length of an examination become less of an issue," he said.
However, Sinton said NZQA needed to ensure it did not merely replace written examinations with digital examinations.
"Otherwise we end up replicating the same system for little benefit," he said.
"It needs to be treated as an opportunity to consider the problems and purpose of assessment in secondary schools."
Tauranga Girls' College principal Tara Kanji said schools needed to reflect the changing world.
However, Kanji was concerned students would have another hurdle to overcome under an "already stressed context" of exams.
"My concern is that the digital tool doesn't become the barrier to being able to perform at exam time," she said.
Kanji said internet reliability, educating staff how to use the new online system and providing opportunities for students and faculty to practice using it had to be addressed before proving potential.
Bethlehem College principal Eoin Crosbie said online exams would change the nature of assessment to be "dynamic rather than static".
"It allows some potential scope for using the internet even in assessments and further opportunities to use assessment tools that up until now have not been possible."
However, Crosbie said widening the scope of assessment could make it unpredictable therefore a poor measure to assessing learning.
"It could be too sophisticated for its own good. It also assumes that students will have devices and infrastructure that makes the assessment fair throughout New Zealand independent of location," he said.
"It is a very difficult undertaking which will not be fit for purpose by 2020."
Last year, 6199 students from 97 schools participated in at least one of the Digital Trial examinations, while 4226 students from 54 schools participated in at least one of the Digital Pilot examinations.
Since 2014, almost three-quarters of New Zealand secondary schools and around 30,000 students have experienced at least one online examination.
Source: NZQA Website