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The university first announced it was going out for consultation on the proposal last week.
Confirming the proposal in an email to staff and students today, acting Vice-Chancellor Professor Helen Nicholson said it had not been an easy decision.
She had spent the past few days reading detailed feedback and meeting staff before deciding that it was the best path forward to deal with the community safety and operational concerns the university faced under the traffic light system, and "a global pandemic which shows no sign of slowing down".
"Ultimately, mandatory vaccination gives us the safest way to operate the university in a manner that is as close to normal as possible, alongside our consistent health measures of masks, physical distancing where needed, and good hygiene.
"This gives our students, the heart of our institution, the best chance to receive the high-quality education they expect from us. It means we can offer on-campus learning at all Covid-19 Protection Framework levels, and close to the normal student experience which Otago prides itself on."
It also offered our staff the reassurance, she said.
"Along with my senior leaders, I am keenly aware that the matter of vaccinations is a divisive one.
"All those living in New Zealand are currently offered a choice – to vaccinate or to not. It is not an easy choice for many, and for some, choosing not to be vaccinated will mean life-altering changes.
"I urge everyone to be kind and respectful of each other, following the core values of this university."
The requirement comes into effect from January 10.
The university had already decided upon mandatory vaccinations for those staying in its residential colleges next year, and also has several staff, students and buildings affected by the Government’s public health order for health and education workers and workplaces.
Staff who chose not to be vaccinated would be able to discuss their employment options with the university, while students who chose not to be vaccinated might be able to choose from a limited range of online study options.