"For our part, we will try to ensure military operations continue in the face of these cyber attacks.
"The nature and intensity of the attacks will differ for each of the participating nations so the learning potential for all participants is likely to be significant."
Teams from Australia, Canada, New Zealand, the United Kingdom, and the United States will respond to the cyber attacks as a coalition, allowing participants to practise interoperability and defence.
It is is the third consecutive year that the NZDF has participated in Exercise Cyber Flag, which began in 2010.
"Exercises such as Cyber Flag test participants' readiness and response capability so they are a great opportunity for us to learn how to better defend our networks while strengthening our relationships with partners," Commander Joint Forces New Zealand Major General Tim Gall said.
"Although we are all using the same tools to defend our respective networks, it will be great to learn how other countries are using those tools to defend their systems."
Earlier this month, the Government revealed up to $20 billion will be spent on New Zealand's Defence Force over the next 15 years, and will include a greater focus on defending against cyber attacks.
Defence Minister Gerry Brownlee said New Zealand had not come under attack by hackers or any other forces.
While Mr Brownlee would not give specific details about the scale of an expanded cyber security unit, but said it would be "significant"and was likely to work in co-operation with the Government Communications and Security Bureau (GCSB).