Team NZ will take on the British Ben Ainslie Racing syndicate in this week's Louis Vuitton America's Cup challenger playoffs.
And their decision, announced at today's post-race press conference in Bermuda, leaves Dean Barker and Team Japan to face in-form Artemis Racing (Sweden) in the other semifinal, starting tomorrow.
Emirates Team New Zealand lost their final qualifying race today against cupholders Oracle Team USA and, with that defeat, a possible bonus point in the America's Cup final, but they had already secured their status as top challengers and the right to choose their semifinal opponents.
"We believe with the forecast over the coming week, that's our best chance of progressing through," said TNZ helmsman Peter Burling.
"We're really happy that we've made it through this first round and we've got to this stage. Today was obviously a pretty good learning experience, we obviously weren't good enough out there, but we'll address that and come back stronger."
The Kiwis' decision was surprisingly pre-empted by USA skipper Jimmy Spithill, who appeared before the challenger teams at the press conference and announced that his "leak" in Team NZ had told him of the BAR preference.
When asked if he thought that was the right decision, Spithill was more circumspect: "Time will tell".
"It's going to be a close race, but to win the America's Cup, you have to beat all the teams," said BAR skipper Sir Ben Ainslie.
"Emirates Team NZ have proven through this qualifying round to be sailing really well and very fast over all the range of conditions, so for us, it will be a real battle, but we're up for it and looking forward to it."
Team NZ have beaten BAR twice already this week, including the walkover on Friday (NZT), when the Kiwis almost lapped their rivals, who withdrew with two legs remaining.
Team Sweden have also beaten Team Japan twice in qualifying rounds and enter that match-up with an upper hand.
In an apparent slip of the tongue, Artemis skipper Nathan Outteridge didn't seem to give BAR any chance of progressing to the challenger finals.
"We know to go and race Oracle, we're going to have to beat, now, Dean [Barker] and Team New Zealand," he said. "We're up for the challenge and excited to do that.
"In the round robins, we've beaten Dean in both races and that gives the team a bit of confidence going forward."