The government is encouraging mental health providers to put forward innovative bids to run a pilot programme to provide free counselling for 18 to 25-year olds.
This year's Budget allocated $10.49mil over three years for the programme.
Health Minister David Clark says the move represents a significant step towards improving access and availability for a range of psychological therapies.
"We need to make a difference to those rangatahi who aren't currently accessing mental health services for a variety of reasons - because they can't afford them, the services aren't appropriate, or because their needs aren't recognised as severe enough," he says.
Associate Health Minister Julie Anne Genter says, "Too many of our young people have been left without support when they need it."
"We need to intervene early to ensure problems don't become tragedies."