The Government has agreed to buy Kiwibank from state-owned shareholders who want out.

The Government will acquire 100 per cent of Kiwibank and NZ Home Loans' parent company, Kiwi Group Holdings, if the transaction gets Reserve Bank approval.

KGH is 53 per cent owned by New Zealand Post, 25 per cent by the New Zealand Superannuation Fund, and 22 per cent by the Accident Compensation Corporation.

Finance Minister Grant Robertson said an ongoing shareholding in Kiwibank did not fit NZ Post's and ACC's long-term strategic and investment plans.

"NZ Super Fund had been interested in purchasing a majority holding in KGH, but withdrew its interest as it did not align with the Government's commitment to public and New Zealand ownership."

When ACC and the NZ Super Fund became shareholders in KGH in 2016, they agreed the Government had first right of refusal over any future sale of shares.

"The transaction ensures Kiwibank remains 100 percent Kiwi-owned, a bottom line pledge that the previous National Government also made in 2016 when the current ownership arrangements were entered into," Robertson said.

The Finance Minister said the Government was grateful for the investment and support shareholders gave KGH over the past 20 years.

"The new ownership structure simplifies our ability to fully support Kiwibank to meet its future potential," Robertson added.

"This is a win-win for the Crown, Kiwibank and for New Zealanders.

"Kiwibank and NZ Home Loans will continue to operate independently and at arm's length from the Government."

Crown ownership of KGH will be expressed through a newly incorporated Schedule 4A company called Kiwi Group Capital (KGC) with a separate board.

The transaction valued KGH at $2.1 billion.

"The process of acquisition is a straightforward transfer of assets and it will not change the overall value of the Crown's consolidated balance sheet," Robertson said.

It required the Government to fund its contribution for the purchase, which will be done through the multi-year capital allowance.

"I want to be clear that this will be business as usual for both Kiwibank and New Zealand Home Loans staff and customers," Robertson added.

"With Kiwibank staying in New Zealand hands, New Zealanders can continue to bank with a trusted, credible and competitive banking option that will remain fully locally owned."