A Ministry of Primary Industries (MPI) spokeswoman says the 4000 cows on the farms affected by the bacterial disease Mycoplasma bovis will go to the works for food processing as the sickness is not a food safety risk.
An MPI veterinarian will assess the health of each animal prior to slaughter.
"No animals which are sick, severely injured or who have medicine in their system will be allowed to be killed for human consumption - New Zealand law prohibits it," the spokeswoman said.
A small number of animals unfit for transport will be humanely euthanised on site and either sold for pet food or disposed of.
Farmers whose cows are facing the cull can apply for compensation. Compensation will cover verifiable losses relating to MPI exercising legal powers under the Biosecurity Act.
Planning has already begun for the major logistical exercise required to cull about 4000 dairy cattle in the Waimate district.
The decision to slaughter the cattle on five Van Leeuwen Dairy Group properties was made as MPI moved to contain the bacterial disease.
MPI director of response Geoff Gwyn told the Otago Daily Times that the cull was not something that would "start tomorrow". Rather, it was a big logistical exercise that needed to be thoroughly planned and co-ordinated.
MPI has carried out tens of thousands of tests for Mycoplasma bovis since July.
Seven properties were found to be infected, but to prevent further spread of the disease "around 4000 cattle on 5 of the 7 infected properties will need to be culled and a programme put in place to decontaminate the properties and then repopulate the farms," he said.
The two other farms have already had their animals culled.
Once depopulation is completed, there will be at least a 60-day stand-down period where no cattle will be permitted on the farms, MPI says. During this time the infected properties will be cleaned and disinfected.