Prime Minister Jim Bolger yesterday announced further details of a new honours system which replaces the traditional British orders with New Zealand-based honours.
The new system retains the Order of New Zealand as the country's top honour, followed by the Queen's Service Order (QSO) and its associated medal (QSM).
It also introduces five tiers of the New Zealand Order of Merit.
Those appointed to the first and second levels of the new order will still be considered knights and dames, and entitled to call themselves sir or dame.
The Queen had approved the New Zealand Order of Merit and the first appointments were expected on June 3, the Queen's Birthday weekend, Mr Bolger said.
"This is a major step in the development of a distinctly New Zealand honours system which reflects our national identity," he said.
Existing holders of British honours would retain their titles and privileges but the Government would no longer make recommendations for British honours, such as the Order of the British Empire (OBE) or Member of the British Empire (MBE).
However, dynastic honours, which were a personal gift of the Queen, might continue to be granted to New Zealanders, the Prime Minister said.
The changes follow a report from the Honours Advisory Committee, chaired by cabinet minister Philip Burdon, which also recommended New Zealand no longer create knights and dames.
The Government decision marks a compromise between some senior cabinet figures - including Mr Bolger - who wanted an end to those honours, and others such as Justice Minister Doug Graham and Environment Minister Simon Upton, who favoured a more traditional system.
There will continue to be two regular honours lists a year, one at New Year and the other on the observance of the Queen's Birthday. There may also be special lists occasionally.
The Order of Merit will have five levels of membership: Knights and Dames Grand Companions (GNZM); Knights and Dames Companions (KNZM and DNZM); Companions (CNZM); Officers (ONZM); Members (MNZM).
Anyone would be able to make a nomination for the New Zealand honours and wider publicity would be given to the nomination process, Mr Bolger said.
The primary emphasis would be on service to the community or nation, and on merit and achievement going beyond the normal requirements of duty or office.
The number of honours will remain at the level of about 350 a year.
The insignia of the new Order of Merit, designed by New Zealand Herald of Arms Phillip O'Shea, blends traditional Maori and British designs, colours and symbolism.
The Badge of the Order will be a cross with the New Zealand Coat of Arms in the centre encircled by the motto "For Merit" and "Tohu Hiranga" (to achieve excellence). It will be set in green enamel, representing New Zealand greenstone.
The Breast Star is based on a stylised representation of the head of the ponga, or silver fern, a well-known national emblem.
Insignias were expected to be available for the investitures of the first members of the new order, either later this year or early next year, Mr Bolger said.
A new system of gallantry and bravery awards for the military and civilians will also be developed.