The Government will provide a financial incentive for students looking to get into trades, offering a $2000 scholarship to the top vocational student in every high school across the country.
The money will be available to the winning students by the end of this year.
Prime Minister Jacinda Ardern said although university was great for further education, the Government would like to see more people in trades.
"For too long trades and on-the-job skills training has played second fiddle in how we see success at school and later career choices."
She said getting more people into jobs, such as construction, plumbing, software engineering and agriculture, was of high importance given the huge skills shortages that exist across many industry sectors.
Ardern hopes the $2000 Vocational Excellence Award for top students would get more students into these professions.
"It will, I hope, send a strong message about the value this Government places on vocational education and encourage new generations of students and their families to recognise the exciting opportunities it presents."
She is encouraging secondary students to apply as soon as they can so schools can include the award in this year's prize-giving ceremonies.
Vocational education is learning that has a special emphasis on the skills needed to do a specific job, or work in a specific industry.
The announcement comes after the Government launched its reform of the vocational education system.
Last week, Education Minister Chris Hipkins announced that all 16 institutes of technology and polytechnics in New Zealand would be brought under a single national institute, the NZ Institute of Skills and Technology, which will start on April 1 next year.
Centres of Vocational Excellence (CoVEs) will be established at regional campuses to drive innovation and expertise, and improve links between education, industry and research.
Hipkins said vocational education, trades training and on-the-job training have been allowed to drift for too long.
He said the Government's move would strengthen the vocational education and training system and help it to respond better to the needs of New Zealand learners and employers.
"These are long-term challenges that this Government is committed to fixing."