KiwiRail has bought the Interislander ferry Kaitaki, the largest domestic passenger ferry operating in New Zealand.
The company said it was securing the future of the Cook Strait link, the "extension of SH1" with the purchase.
The ship had previously been leased.
The Interislander fleet opened up the main line of travel between the islands, said KiwiRail chief executive Peter Reidy.
"Our ships are vital for tourism, and an important piece of the integrated transport network for freight, with road and rail working together to help drive New Zealand's growth.
"Last financial year KiwiRail's Interislander ferries carried more than 1 million net tonnes of freight, 83,000 commercial vehicles and 800,000 passengers.
"The ability to move large numbers of passengers across the strait is critical for KiwiRail's tourism business, and for New Zealand's tourism industry, which is the country's largest earner of overseas funds."
Nearly 190,000 people are employed in the Kiwi tourism industry, and KiwiRail makes up to 4000 sailings across the Cook Straight a year.
"Ensuring visitors are able to travel between the North Island and the South Island easily makes sure that the benefits - and the jobs - are spread through the country.
"The Kaitaki can carry up to 1350 passengers, more than the Aratere and the Kaiarahi combined."
He said uncertainty about the future of the ship's lease, which had been held by a company in Dublin and was due to run out in 2020, spurred KiwiRail's move to purchase.
"There is a world-wide shortage of suitable second hand ferries and heavy competition for those ships that are available, so the best option was to take up the opportunity to purchase the ferry."
Passengers and freight customers will not notice any change as a result of the purchase, Reidy said.
The only difference was the ship would be registered in New Zealand instead of Portsmouth.
"The Interislander team is dedicated to providing the very best of service both to our passengers and to those shipping freight across the strait. This purchase is an important part of doing that."