Kiwi ice cream manufacturers Tip Top says it will change the name of its controversial Eskimo Pie product, a move reflecting similar rebranding of the product in the US.

On the same day, New Zealand confectionary-maker Pascall has announced it will rebrand Eskimo lollies.

Tip Top first began making Eskimo Pies in the 1940s and it's still the top-selling multipack ice cream in New Zealand today.

Tip Top Director Ben Schurr said that since then, the name of the product had "changed meaning".

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The term Eskimo is seen as derogatory towards Inuit or Native Alaskan people.

"We have been considering renaming this product and removing the Eskimo character from the packaging for a while now," Schurr said.

"We're making plans to put the changes in place over the next few months."

Pascall owner Mondelez New Zealand told Stuff that the name and branding change of its Eskimos lollies would be rolled out soon.

"While Pascall Eskimos have been enjoyed in New Zealand for over 65 years, it is important to take this action to ensure that the business is part of the solution and helping to drive positive change," the company said.

In the US, Eskimo ice cream's parent company Dreyer's Grand Ice Cream told Rolling Stone they admitted the term was "derogatory".

"We have been reviewing our Eskimo Pie business for some time and will be changing the brand name and marketing. We are committed to being a part of the solution on racial equality, and recognise the term is derogatory.

"This move is part of a larger review to ensure our company and brands reflect our people values."

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Changes to the brand are on the way in New Zealand, but while many on social media welcome the change, others are criticising the move as too "politically correct".

It's the latest in a string of products being renamed in light of the Black Lives Matter movement, as brands rethink product names that are seen as racially insensitive.

Earlier today, Nestle promised to rename its Red Skins lollies, saying the name is now "out of step" with the company's values.