Cabinet has agreed to allow councils to introduce congestion charges, with legislation to be introduced this year, Transport Minister Simeon Brown says.
Councils will be able to apply to introduce such time-of-use schemes - with Auckland Council the top priority, he said.
The move was a commitment in the ACT coalition agreement.
The schemes would reduce travel times on the busiest roads and boost economic growth, Brown said.
"Congestion is a tax on your time, and on productivity. It means that we are away from home for longer sitting in gridlock, and it results in fewer jobs being done, fewer deliveries, and delays to services across the city."
The New Zealand Transport Agency/Waka Kotahi would work with the local councils to develop individual time-of-use charging schemes, deciding on costs and the most efficient movement of traffic for each city or region.
"This is an enabling piece of legislation", Brown said. "Councils put forward the proposal, NZTA will then work in partnership as a majority partner... to make sure that it looks at network efficiencies - so not just one part of the network but overall network efficiency - and then there's going to be rigorous oversight as well."
Public acceptability would be key and it would take a couple of years before the first scheme was fully in place, Brown said. He would not give a timeframe at this point, nor set down a specific range of possible charges.
The legislation would go through a full select committee process, giving the public the opportunity to make submissions.
"We want to take the time to get this right so that we can make this fundamental significant difference for New Zealand," Brown said.
Any charges would not be about drumming up revenue, he said, as all money raised required to be invested back into transport infrastructure.
It was about efficiency of the network and allowing people to get more easily around their town or city.
"If you're a concrete truck driver and you are sitting in congestion and you're only able to do two trips a day, the additional revenue you're able to make as a business from doing three or four trips far outweigh the small charge you may have to make.
"That's what all the modelling says ... If you're a tradie getting around Auckland and trying to get more jobs in, this is going to be good for you."
Councils and the government would need to work with the public to make the schemes robust and enduring, he said.
"We need to make sure that we take the public with us on this journey. It's all very well for transport experts to sit around a room and say 'this is how it's going to work and isn't this amazing' but actually we need to make sure we have a really good conversation and discussion.
"I'm more focused at this stage on making sure we get the policy right."
The minister confirmed the government would be signing off on each individual scheme.
"We see Auckland as being the number one ... once that legislation's in Parliament then we'll start having more rigorous conversations.
"Time of use schemes will need to consider the impacts on motorists and businesses that use the roads that fall within the charging areas, as well as the impacts on the wider network.
"Any money collected through time of use charging will also be required to be invested back into transport infrastructure that benefits Kiwis and businesses living and working in the region where the money was raised. Councils will not be able to spend this money on other priorities or pet projects."
The charges were not a stand-alone solution to managing congestion and Roads of National Significance as well as major public transport projects would continue to be prioritised, he said.
AA policy director Martin Glynn told RNZ's Midday Report programme other than Auckland, Wellington and Tauranga also faced difficulties with congestion and would likely be in line for bringing in charges.
"I mean, I think if you look at the conventional solutions of road building in particular it's no longer practical in our built-up parts of our cities, so congestion's just getting worse.
"We'll have to wait and see what's in the legislation but we'll be looking for particular evidence that it's targeting particular reductions in travel times and more reliable journeys for people."
The Employers and Manufacturers Association (EMA)'s head of advocacy, Alan McDonald, said congestion charging would mean big productivity gains for businesses.
In a statement, McDonald said it would mean better utilisation of the road capacity, pointing to data showing Aucklanders spent 22 million hours per year sitting in traffic.
"That equates to a $1.3 billion annual hit to GPD," he said. "Time of use charging is an overdue solution that has been successfully trialled around the world."
Labour's Auckland issues spokesperson Shanan Halbert told RNZ Aucklanders wanted better transport options - not more tax.
He pointed to Brown having previously being opposed congestion charging, saying he did not want to add further cost to people using the roads during a cost-of-living crisis.
"We've seen an increase in rates, we've seen an increase in public transport, but what we're not seeing is actual solutions in order to decongest our city and to make transport more affordable for Auckland."
Labour had started work on legislation to enable congestion charging but never completed it. Halbert said the party had not yet discussed whether it would support the government's legislation, "but what we'll need to see from the minister is how is he going to overcome the cost challenges that Auckland will face while he's pushing this through".
"Labour's been very clear that they support a congestion charge to see the behaviour change and decongest the city, but where Labour is clear is that there needs to be viable alternative options for Aucklanders and affordable options, and that will be the baseline for us."
Brown's approach - despite the minister's claims to the contrary - was focused on revenue generation, Halbert said.
Asked for evidence of this, he pointed to the cancellation of the regional fuel tax and public transport subsidised brought in during the Covid-19 response.
"The minister's realised that there's a $1.2 billion deficit in Auckland's infrastructure, he's got to find money to help out with that to fill the hole that he has created, and Auckland Council will have to carry the burden of putting the congestion charge in place.
"He's absolutely gutted Auckland Council's ability to build infrastructure that this city needs, he's taken away half-price and free public transport that's added more cost onto Aucklanders, that's evidence enough."
