About 300,000 tertiary students will benefit from a $25 million investment to mental health and wellbeing services at tertiary education institutes.
Funding is aimed to assist students in managing ongoing stress related to Covid-19.
"Mental health is a priority for this Government, and it's never been more important to ensure that our young people have access to the help they need it, when they need it," Education Minister Chris Hopkins said.
In a post on its Facebook page, New Zealand Union of Students' Associations (NZUSA) the NZUSA President Isabella Lenihan-Ikin says: "This is an overdue victory for students in Aotearoa New Zealand."
"We are experiencing an epidemic of mental health issues among young people and students in this country. The underinvestment in mental health services has led to many people being denied the help they need," Lenihan-Ikin said.
A Request for Proposals (RFP) process led by the Ministry of Health will get underway from November to select services to deliver the support.
Green Party mental health spokesperson Chlöe Swarbrick said: "This is a huge win for students and their families."
The expansion of the services will start next year.