Drink-driving limits are set to be slashed in New Zealand while the government is also looking at new penalties.

Transport Minister Gerry Brownlee says the limit will drop from 80mg of alcohol per 100ml of blood to 50mg for drivers aged over 20.

Those over 51mg but under 80mg will face new infringement notices, including a $NZ200 ($A176) fine and 50 demerit points, meaning if they are caught twice they will lose their licence for three months.

Mr Brownlee says officials will also report next year on other penalties for drink-driving offences.

New legislation is expected to have its first reading before the end of the year, but the changes won't come into effect until some time in 2014.

Labour MP Iain Lees-Galloway has a private member's bill to make the same change but Mr Brownlee says that bill would need multiple changes, so the government will instead create its own legislation.