Mr Tremain said voter turnout in local body elections was traditionally low and there needed to be other ways to encourage people to become involved in the democratic process.
"Online voting will be more convenient and appeal to young voters. It will also make it easier for people with disabilities to vote."
Mr Tremain said robust regulations needed to be in place so voters had trust and confidence in the system.
Internal Affairs would form a working party, made up of information technology experts and representatives of central and local government, to consider the options, costs and security issues involved in online voting.
"The working party will be assessing the security and technology used in public elections overseas to mitigate risk."
An online voting plan would be formed after the working party had reported back.