On average, young people aged under 18 who live in areas with water fluoridation will have a 40 per cent lower lifetime incidence of tooth decay.
In 2013, more than 40 per cent of all 5-year-olds and more than 60 per cent of Maori and Pacific 5-year- olds had already experienced tooth decay.
"Water fluoridation has been endorsed by the World Health Organisation and other international health authorities as the most effective public health measure for the prevention of dental decay.
"There's still choice around fluoridation, but the DHBs will be making the decision. But, yes, I want to see more fluoride in New Zealand water supplies."
Associate Health Minister Peter Dunne said taking the power to decide from local authorities was recognition that water fluoridation is a health-related issue.
"It makes sense for DHBs to make fluoridation decisions for their communities based on local health priorities and by assessing health-related evidence."
Legislation is expected to be introduced to Parliament later this year.
Local Government New Zealand president Lawrence Yule welcomed the Government's proposal, and said fluoridation was a health decision best made by experts.
At a 2014 conference, local government members passed a remit asking that the Government give the decision on fluoridation to the Director-General of Health.
"Assessing claims about the value of fluoride and its potential harm falls outside the expertise and experience of local authorities," Mr Yule said.
"In recent years, many councils have had their decisions to fluoridate water supplies challenged in court, creating unnecessary costs for ratepayers and uncertainty for the councils themselves."
Mary Byrne, national co-ordinator of the Fluoride Action Network NZ, which has been campaigning to remove fluoride from water supplies, said the change would be opposed by many people in areas like Christchurch and Nelson, that currently did not have fluoride added.
"It is mandatory fluoridation by the backdoor, because the DHBs have to follow Ministry of Health policy. DHBs all around the country will say they have to have fluoridation.
"It is a really, really backwards step ... people will be up in arms."
In 2014, a high-level panel found no adverse effects of fluoridation of public water supplies after a review of scientific evidence.
The review, titled Health Effects of Water Fluoridation: a Review of the Scientific Evidence, was commissioned by the Prime Minister's chief science adviser Sir Peter Gluckman and the Royal Society of New Zealand president Sir David Skegg.
The review looked at the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies, finding the levels used in New Zealand created no health risks and provided protection against tooth decay.
Those councils already adding fluoride to water in New Zealand -- amounting to less than half -- could be confident about its public health benefits, while those not currently fluoridating water could consider it a safe and effective option, a statement issued on behalf of the panel said.
In January, the Whakatane District Council voted to stop adding fluoride to any of the district's public water supplies.
Bay of Plenty District Health Board's chief executive, Helen Mason, spoke out against that decision, and it was later reversed at council level.
Fluoride occurs naturally in water supplies, but levels are generally low compared with other countries.
Fluoride changes
• Local authorities currently have the power to keep, add or remove fluoride from water supplies.
• That will change under Government proposals, that would see District Health Boards decide on fluoridation.
• About 2.3 million New Zealanders live in areas that have fluoridated water.
