Communications Minister David Cunliffe has plugged a hole in outer space by giving the green light to New Zealand's first satellite - but it will not take to the skies until 2010.

Cunliffe has approved an application by NZLSAT to launch a communications satellite and thus fill New Zealand's orbital slot, which is unused.

The approval paves the way for the possibility of better broadband and broadcasting capabilities.

"The venture could mean increased capacity for broadband, broadcasting and civil and Government communications," Cunliffe said.

Other potential benefits could include improved communications abilities for military and civil emergency agencies.

NZLSAT said the target date for service availability was January 2010.

Director Paul Hannah-Jones said while most of the early-stage funding would be provided by the Ministry of Economic Development, the satellite would primarily be a private-sector project. The possibility of the Government taking a stake in the satellite would remain open.

Hannah-Jones said it would provide "a broad range of communications services to a wide range of users". Its uses would depend entirely on the customers that signed up. Possible clients could be anyone from Sky TV to Telecom.

The satellite would also provide services to Australia and the Pacific Islands, but Hannah-Jones hoped to see a "significant portion" of its capability dedicated for New Zealand use.

NZLSAT plans to open an Auckland office and appoint a general manager early in the new year.