The Government has announced it will ban any foreign donations to political parties and candidates over $50 in a bid to "protect New Zealand from foreign interference".

Legislation will be introduced to Parliament this afternoon and passed under urgency.

Justice Minister Andrew Little said there was no need for anyone other than New Zealanders to donate to our political parties or seek to influence our elections.

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"The risk of foreign interference in elections is a growing international phenomenon and can take many forms, including donations. New Zealand is not immune from this risk."

He cited a recent Canadian Government report which found half of all advanced democracies holding national elections had their democratic process targeted by cyber threat activity in 2018.

That represented a threefold increase since 2015.

"We must protect New Zealand as best we can from this risk to our democracy," Little said.

The bill contains a minimal threshold of $50, to ensure that small-scale fundraising activities such as bucket donations and whip-rounds won't be affected. But big donations will be gone.

It also introduces a new requirement that party secretaries and candidates must take "reasonable steps" to ensure that any donation is not from an overseas person.

Little said the Electoral Commission will issue guidance on what these "reasonable steps" entail.

Under the current rules, parties are not allowed to retain donations or contributions exceeding $1500 made by an overseas person.

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That includes individuals who reside outside New Zealand and are not a New Zealand citizen, registered body corporates incorporated outside New Zealand, or an unincorporated body based outside New Zealand.

A spokesperson for National Leader Simon Bridges said MPs are still in their weekly caucus meeting and will comment later today.

But Bridges has previously indicated National would support banning foreign donations.

"The reality of the situation, as I understand it legally, is for the most part overseas donations and the like are unlawful but there are a few small areas, such as under $1500 and so on, [which] is worth getting submissions on and clearing up," he said last month.

The new law will also extend the requirement to include name and address details on election advertisements to apply to election advertisements in all mediums.

"We've seen in other countries an avalanche of fake news social media ads that contain no information about who is behind them. That's not fair and we don't want to see it repeated here.

He said that anonymous online advertisements aimed at interfering with our democracy will be prohibited.

"If someone wants to advertise online they need to say who they are, the same as if the ad was published in a newspaper."

The Green Party, which has been lobbying for this change, welcomed the news.

"Limiting foreign donations to $50 will reduce undue influence from powerful vested interests and create a healthier and fairer system," the party's justice spokeswoman Golriz Ghahraman said.