A $4 million fully electric and zero emission passenger ferry set to be built in New Zealand will be the first of its kind in the Southern Hemisphere.

Construction on the 19m long vessel will start over the next few months and it will be ready for service in Wellington next December.

It will be launched by the East by West Wellington Harbour ferry service and will be the country's first all-electric, carbon-free and zero-emission passenger ferry.

East by West Ferries director Jeremy Ward said: "The new vessel will be powered by twin electric engines which will enable a 20-knot operational speed and three return back-to-back peak-hour trips on one charge before a second one-hour charge is required.''

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The ferry will have a unique hull design different to conventional diesel-powered vessels.

"This one will have a displacement hull made from flat carbon fibre panels and only the lower hulls needing moulding.

"The flat panel topsides lend to a chiselled look and in this way, tooling costs are minimised,'' Ward said.

"The new ferry will cut through the harbour like the proverbial hot knife through butter.''

The company is in talks to select a major NZ-owned electricity generator for the ferry.

A new boat-building agency - the Wellington Electric Boat Building Company (WEBB) - has been established as a result of the new vessel.