Queenstown will be the first town in New Zealand to be lit with streetlights hailed as significantly energy efficient and environmentally friendly.

This week, Queenstown Lakes District Council's utilities committee decided to accept a gift of seven LED (light emitting diode) streetlights worth $15,000 from Auckland-based company Ad-vanced Lighting Technology Ltd.

Made in the United States, the lights will replace three out-dated mercury vapour and four high-pressure sodium lamps near the corner of Frankton Rd and Stanley St and in Queenstown Gardens.

The work will be done at the same time as a project to install underground wiring in the area, QLDC community services general manager Paul Wilson said.

There are about 3000 street lights in the district and QLDC already has a programme to replace high-pressure sodium and mercury vapour street lights with energy-efficient sources of white lighting which increases visibility, making lit areas safer.

Yellow light from high-pressure sodium lamps turned colours into shades of brown or yellow, Mr Wilson said. In contrast, the LED lights shed white light, allowing high colour visibility and recognition.

Unlike older streetlights and fluorescent light bulbs, LED lamps contain no mercury or hazardous substances, making them less toxic to the environment, Advanced Lighting Technology business development officer Mark Kirkham said.

He said that when properly made and fitted, LED lights were an "install and forget" option because they needed little maintenance and would last up to 150,000 hours.

"They don't need replacing every four years so there's less waste in the environment," he said.

He believed the technology would eventually take over from the compact fluorescent bulbs which have been promoted as energy efficient.

"They have had a place but they do contain small amounts of mercury and when you look at the amount out there it becomes an issue," Mr Kirkham said.

The performance and energy saving of the LED lighting will be evaluated.

The lights and poles have been given to the council but installation would cost about $2000.

However, that money would be made up in energy savings - the lights are expected to consume two-thirds the energy of standard lamps each year.