The babies receive blood tests at birth and if sugar levels are low in are treated an intensive or special care unit, separating mother and baby at a critical time for establishing breastfeeding.
The study, by the Department of Paediatrics and the Liggins Institute at the University of Auckland, will involve 2129 newborns and is already under way at eight hospitals.
Babies have either a 40 per cent sugar gel in the form of a dextrose rubbed inside their cheek or a placebo gel with no sugar. All other care is the same.
The study has been dubbed hPOD - Hypoglycaemia Prevention with Oral Dextrose
A preliminary study, designed to find the best dose to use, showed a single dose of sugar gel administered an hour after birth, could lower the risk of low blood sugar.
"We were very excited about those results," University of Auckland Medical School senior lecturer and Auckland Hospital paediatrician Dr Jane Alsweiler said.
"Using dextrose gel to prevent low blood sugars has the potential to stop babies being separated from their mothers in hospital and to improve their long-term development, without any disruption of breastfeeding," she said.
"There was also a trend towards fewer babies needing to go to intensive care for hypoglycaemia. The main hPOD trial will have enough babies to show this outcome more conclusively."
Women who wish to take part in the trial should be intending to breastfeed their baby.
The study is also being run at Waikato Hospital, Auckland Hospital, North Shore Hospital, Waitakere Hospital, Whakatane Hospital, Tauranga Hospital, Southland Hospital.
It is led by Distinguished Professor Jane Harding from the Liggins Institute. She also led research that pioneered the use of the same sugar gel as a treatment for low blood sugar in newborns - now routine in many New Zealand hospitals and in a growing number of hospitals overseas.
"We thought if it works well to treat babies with low blood sugar, could we use it to prevent babies getting low blood sugars?" she said.
"If we could do that, we might reduce the number of blood tests they need, reduce the amount of angst that families experience, and potentially even prevent brain damage."