The Chinese-made fuel has been sent to Wellington and will be used on the airline's turbo-prop planes, principally on regional routes.
It will power the equivalent of 165 jet flights between the capital and Auckland.
Chief sustainability and corporate affairs officer Kiri Hannifin said the green fuel was a small step in moving away from fossil fuels and reducing carbon emissions by 2050.
"For a small island nation in the South Pacific, alternatives are even more important, because we are heavily reliant on flying to connect with each other in our own country, as well as when we travel abroad," she said.
"We must act as quickly as we can to transition to a lower-carbon future. At the moment, SAF is the key way aviation will move towards this."
She said the fuel produced 80 percent less carbon emissions than standard jet fuel and Air New Zealand was signalling to sustainable fuel manufacturers that it was a customer.
"Airlines are signing supply arrangements for SAF 10 years into the future and beyond, so we need to be part of the picture from the start otherwise New Zealand may fall behind.
"While the volumes of SAF we are buying are very small compared to the amount of fossil jet fuel we use, they give an important signal to alternative fuel producers that we are open for business."
New Zealand first began using SAF in 2022.
Hannifin said various countries were already taking steps to require the use of sustainable fuel.
From 2026, Air New Zealand would be required to use the green fuel when flying home from Canada and Singapore, with Japan to require it from 2030.
