Authorities will slaughter 126,000 more cattle in an attempt to completely eradicate the bacterial disease Mycoplasma bovis. That's in addition to the cull of 22,000 currently underway.
The decision will cost $886 million and take 10 years. It's the first time MPI has done a response at this scale.
Most of the eradication work will take place in the next two years.
New Zealand will become the first country in the world to attempt to eradicate the disease, Ministry of Primary Industries (MPI) response director Geoff Gwyn said at the release of the decision.
Most countries are already infected, and their productivity is reduced as a result.
Despite the cost of the plan, and despite the number of cattle that will be culled, there's no 'cast-iron' guarantee that the eradication attempt will work.
But the decision has backing from industry bodies Federated Farmers and DairyNZ.
Federated Farmers say the decision will cause pain for some farmers, but the organisation supports the Government's move.
"We have to remember the pain and trauma it is causing for families involved," spokesperson Katie Milne said.
"Industry has always, from the beginning, been committed to working with the Government to eradicate."
DairyNZ said we must focus on the thousands of farmers and millions of cattle that have not been affected.
"Having this disease can be disastrous for a herd," DairyNZ chair Jim van der Poel said.
"The animals may get sick and there are significant animal welfare issues - something no farmers wants their animals to go through.
"There is also an impact on production that has serious ramifications for farmers, the dairy sector and our economy."
Sixty-eight percent of the cost will be borne by Government, with DairyNZ and Beef+Lamb NZ meeting the remaining 32 percent.
While that's expensive, the Government says the projected cost of long-term management of the disease would be $1.2 billion, of which $698 million would be in lost production borne by farmers, and $520 milion the cost of response.
The Government says not acting at all would cost $1.3 billion over 10 years in lost productivity.
At its heart, the incursion of Mycoplasma bovis into New Zealand has been an animal welfare issue.
In adult cattle, the bacteria causes severe arthritis, late-term stillbirths and untreatable mastitis.
Calves have little defence against the disease. It can cause a hacking cough leading to severe pneumonia, as well as ear infections and conjunctivitis.
Prime Minister Jacinda Ardern said it was a difficult decision.
"This is a tough call. No one ever wants to see mass culls, but the alternative is to risk the spread of the disease to the national herd."
Agriculture Minister Damien O'Connor said eradication is possible because the disease is not widespread.
"We all agree that while there remains a chance to get rid of this disease - we should take it," he said.
Mr Gwyn said it's been a wake-up call for farmers.
"I don't think there are many farmers left in New Zealand now who don't understand the importance of NAIT (National Animal Identification and Tracing)."
Mycoplasma bovis does not spread to humans and the meat and milk from infected cows can still be consumed.
As long as animal movements are strictly controlled, infected farms can chose to continue the milking season before culling the herd.
MPI says there are minimal risks for any farmers dealing with other farms not under controls.