The Government will lift the annual refugee quota to 1500 and establish more settlement centres around the country.

But it won't happen until 2020.

Prime Minister Jacinda Ardern, Deputy Prime Minister Winston Peters and Immigration Minister Iain Lees-Galloway made the announcement following a Cabinet Committee decision today.

The current six-week reception programme at the Māngere Refugee Resettlement Centre in Auckland will also be shortened from six weeks to five under the changes to take effect from July, 2020.

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"I'm proud that the coalition Government has today agreed to make such a significant and historic increase to the annual quota of refugees," Ardern said.

"This is the right thing to do. It fulfils New Zealand's obligation to do our bit and provide a small number of people, displaced by war and disaster each year, a place to call home."

Ardern said the 2020 date was necessary to ensure that preparations were in place to support the refugees when they arrived.

"New Zealand has a proud record of wrapping support around refugees who make New Zealand home. In fact, we're some of the best in the world. In order to retain that record of being the best in the world we need to start that early preparation.

"Overall though, this policy will change lives," she told reporters.

An extra six settlement locations would be needed nationwide on top of the eight already in operation around the country, Lees-Galloway said.

No decisions had yet been made on where the settlement locations would be.

The Government will also fund the expansion of public housing for around 150 extra refugee families at an estimated cost of $32.5 million over three years.

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Budget 2018 provided $6.2 million of new operating funding over the next four years, plus $7.7 million of new capital, for refurbishment and expansion of the Māngere Refugee Resettlement Centre in Auckland.

Peters said he had no reservations about the decision. "I'm very delighted to be part of this decision."

"This is about people, not about politics and controversy."

"This was always on the cards, that it would be done when we had all the work done on the refugee centres, also the housing preparation and a host of other things," Peters said.

The refugee quota became an issue of contention recently after Peters appeared to pour cold water on raising it, telling reporters while in Nauru for the Pacific Islands Forum that New Zealand First had never made a commitment to double the refugee quota.

"We've got 50,000 people who are homeless back home, and I can show you parts of the Hokianga and elsewhere, parts of Northland, with people living in degradation. We have to fix their lives up as well before we start taking on new obligations of the level that some people would like," he said at the time.

National leader Simon Bridges called it an agreement "cobbled together" before Ardern's upcoming visit to the United Nations.

"There's got to be a secret deal between the Labour Party and Winston Peters on this. We know he's eaten humble pie on this, he just doesn't like this at all, and he doesn't go cheap."

Bridges wouldn't say whether National would wind back the quota if it won the next election, saying they would have to look at it.

His immigration spokesman Michael Woodhouse said the current quota of 1000 refugees was "about right".

"It costs around $100,000 per person per year to properly settle refugees to help them integrate and lead productive lives here and any increase needs to be balanced against other priorities," he said in a statement.

Green Party immigration and human rights spokeswoman Golriz Ghahraman said now was the right time to increase the quota.

"At this moment in global history, taking more refugees is a reflection of the strength of our values. It is the right thing to do," she said in a statement.