It has endorsed the "three plus one" model - three years of an ordinary degree followed by an honours postgraduate year.
The honours year will be worth 120 points and include a research project worth at least 30 points.
The only exceptions will be in law, physical education and surveying, where students already require four years to complete an ordinary degree. Honours students in those subjects will also be able to complete their degree in four years.
At present, some divisions and departments offer a four-year honours degree system, where particularly academically able students are identified early in their study and complete an additional year of study for an honours degree, while others offer the three-plus-one system.
A working party made some decisions in 2004 but not all of its recommendations were implemented, vice-chancellor Prof Sir David Skegg said at a recent university council meeting.
Another working party was convened last year. It agreed there was a need for standardisation but did not reach a conclusion about which model it favoured, he said.
It was asked to consult further with divisions and departments and specify one preferred model to be introduced across the whole university.
Despite academic differences, working party members had reached a consensus and recommended the three-plus-one model, Prof Skegg said.
"There was a feeling the 'do what you like' model couldn't stay the way it was."
Otago was the last of New Zealand's eight universities to introduce an honours postgraduate year, he said.
One of the merits of the system could be Otago attracting more high-calibre students who would choose to do an honours year at Otago after completing an ordinary degree elsewhere, the working party report said.
The postgraduate year model would also "greatly improve" Otago's rate of progression to postgraduate study, as measured by the Tertiary Education Commission, the report said. Because of the many four-year honours degrees Otago offered now, its progression rate was the second lowest of all the universities.
Otago University Students Association president Harriet Geoghegan, a University Council member, said students had discussed the issue and were keen to see a standardised system.
