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The Government intends to raise the age of youth justice to 18 from 2019.
Some Opposition parties and advocacy groups like JustSpeak had been pushing for the change, but as recently as last week Social Development Minister Anne Tolley was downplaying the possibility.
It means lower risk 17-year-olds will be handled by the Youth Court, where there is more of a focus on rehabilition.
Violent crimes like murder, rape, and aggravated assault will still be dealt with in adult courts.
New Zealand is one of the few countries that still tries 17-year-olds in the adult criminal justice system.
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