The New Zealand Transport Agency (NZTA) said an investigation has found "serious misconduct" involving five driver testing officers at the the VTNZ Highbrook branch in Auckland.
The officers had allegedly been accepting payments to pass people taking practical drivers tests since 2023.
The five officers have been dismissed and their testing officer endorsements have been suspended while NZTA investigates these allegations.
VTNZ has also stopped offering driver licence testing at the Highbrook branch while investigations occur.
As a result, 322 people are required to re-sit their driving tests.
"NZTA is contacting the people who were tested by these DTOs and received a driver licence during the period where fraud was suspected and requiring them to pass an on-road driving test, at no cost to them, to confirm that they have the necessary skills to continue to hold a licence," a NZTA spokesperson said.
Police confirmed to RNZ they are investigating the allegations.
VTNZ said it has reviewed its systems and evaluated any extra security measures as a precaution.
"We have confidence in our team and our processes for Driver Licence testing," VTNZ country manager Greg O'Connor said in a statement to RNZ.
"I promise that we will take the strongest action against any employee found breaking the law and our trust.
"Anyone sitting their Driver Licence test can still have complete faith in VTNZ."
O'Connor said public safety is VTNZ's highest priority.
"We have zero tolerance for dishonesty, and will leave no stone unturned to uncover and eliminate any improper behaviour."
VNTZ is New Zealand's largest provider of driving tests, carrying out over 200,000 practical driving tests each year.
