The Government has awarded service contracts to six banks.
Westpac will continue to be its transactional banker for 35 core government agencies while ANZ, ASB, BNZ, Citibank and Kiwibank can handle services including foreign exchange, payments and cards for other government agencies.
The contracts were announced today after services were put out to tender for the first time in 25 years.
Finance Minister Bill English and Economic Development Minister Steven Joyce said in a joint statement there had been considerable changes in the banking sector over that time.
"The new contracts will deliver cost savings for government agencies and all New Zealanders," the ministers said.
"Negotiated price benefits and innovation commitments of more than $120 million have been secured over the life of the contracts."
The contracts will run for up to eight years.