Minister of Health David Cunliffe announced yesterday $12 million would be made available over the next five years to fund additional training places for postgraduate students.
In 2004, the Government increased funding to the University of Otago and the University of Auckland, which operate New Zealand's two medical schools, to allow an additional 40 medical students to be trained.
Those students were about to move into postgraduate medical training, Mr Cunliffe said in a statement.
The Government had committed to increasing the number of doctors working in New Zealand, and lifting the number of training places would benefit the country for years to come, he said.
Labour had also promised to increase the number of medical students nationally by 100 before 2011.
No further details were available yesterday on how the postgraduate training money would be split between the two medical schools, or exactly how and when it would be spent.
But the dean of the Otago Medical School, Prof Don Roberton, said yesterday the extra funding was "very welcome".
"Training in medicine is a continuum, from the time of entry to medical school to completion of specialist training.
"The early years immediately after completion of medical school and when commencing in the health workforce are very important ones for further career development.
"Provision of employment and support for learning during this period of time is vital to New Zealand's medical workforce."
