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The Dunedin City Council is set to start replacing the city's ageing high-pressure sodium street lights with LED lights from July 2019.
The lights have already been installed in Melbourne, Oxford and Fawcett Sts as part of a trial.
Three companies have bid for the contract to supply the lights and a central control system, which will govern the brightness of the LEDs.
But the technology which powers the lights is also able to be used for monitoring.
Sensors, microphones and even cameras can be attached to the circuitry to monitor traffic and pedestrians.
Council transport manager Richard Saunders said there were no plans to incorporate the technology into the new lights, though the council might consider it.
Feedback from residents on lights installed in South Dunedin was still being received and a summary would be released early next year.
New LED street lights will also be installed on state highways.
NZ Transport Agency network manager Chris Harris said the agency did not intend to gather additional information by adding sensors to the new street lights on state highways.
Software would be used to monitor factors such as energy consumption and the presence of faults, Mr Harris said.
There was already a network of CCTV traffic cameras and traffic monitoring counters on state highways which provided information on traffic, road conditions and weather.