SNP Chips was the result of genetic sequencing of the sheep genome and allowed researchers to understand the effects of small genes rather than just the large genes currently possible.
"It allows you to get better predictions of what the actual worth of an animal is," AgResearch Invermay senior animal genomics scientist John McEwan said.
Cumulatively, small genes could add up to 50% to 95% of genetic variation between animals, he said.
Mr McEwan said research on the technology began 20 years ago.
It could take another 10 before it was fully adopted by the sheep industry.
In the dairy industry, the two large artificial insemination companies - LIC and CRV Ambreed New Zealand - had already adopted SNP Chips, but Mr McEwan said sheep farmers in general wanted to see how others adapted it.
The United States dairy industry provided evidence of how the technology could be used.
Historically, each of the top 40 bulls used in artificial insemination programmes would have be rated following testing of 80 to 100 daughters, by which stage the average age of each sire was five years.
Since using SNP Chip technology, just three of the top 40 sires have progeny in milk, with the others ranked on DNA and parental information.
"That allows generations to be shortened, more accurate breeding values and greater genetic progress," he said.
Similar progress could be made for the sheep industry, he said, and three SNP Chip products were likely.
The first would be used on rams to more accurately predict the performance of progeny for traits such as number of lambs born.
The second would be used for the top tier of stud rams to selecting those from which to breed, based on traits such as meat yield or other desirable attributes.
The third expected test - "parentage-plus" - would record the birth dam and sire, while adding other tests such as for the Inverdale gene, the MyoMax DNA test to identify leaner and meatier carcasses or a test for facial eczema resistance.
But to be really useful and accurate in sheep, the SNP Chip tests needed to be continually calibrated and updated.
The New Zealand SNP Chip work on sheep was funded by Ovita, a joint venture between Meat and Wool New Zealand and AgResearch.
The consortium was 18 months into its second five-year contract and Mr McEwan said it hoped to embark on two research programmes.
One would involve identifying animals which had superior performance while requiring less feed.
The other, in conjunction with the Pastoral Greenhouse Gas Research Consortium, would look at the breeding of animals which released less methane.
"We're hopeful we can do this, particularly the methane one.
We're not on a dead-cert, but it maybe possible to breed an animal which releases less methane - but whether it is economically viable is another story."
In the future, the SNP Chip would be viewed as comparable to the contribution computers had made since the 1980s and which underpinned Sheep Improvement Ltd, LIC and Blup (best linear unbiased prediction) technology, he said.
"People will look back in 10, 15 or 20 years and say there was pre-SNP Chip and post-SNP Chip; it's that big a thing," Mr McEwan said.