The government is setting out to improve regional healthcare services through a new School of Rural Medicine.
The school will be operational by 2020 following a contestable business case process, Tertiary Education, Skills and Employment Minister Paul Goldsmith says.
Two proposals have already been put forward including one from the University of Waikato and Waikato DHB seeking $300 million from the government over 10 years.
Auckland and Otago Medical Schools have also made a joint proposal.
"The new School of Rural Medicine will be specifically geared toward meeting the challenges faced by high need and rural areas of the country, and will produce around 60 additional doctors per year," Mr Goldsmith said.
"It is our intention that the successful applicant will be known in 2018 with the new medical school to be up and operating no later than 2020."
The government contribution will include existing tertiary fund and future operating and capital allowances.