The process has been designed to avoid clashes with the Gallipoli centenary and the 2017 general election, but a Cabinet paper admits the timing will be tight.

New Zealand Prime Minister John Key confirmed today that legislation would be introduced into Parliament to start the process for two binding referendums.

The first will decide a preferred option from a selected range of designs, and the second would pitch that choice against the existing flag.

Mr Key has made no secret of his belief that he believes it is time for New Zealand to change the flag that has been in use since 1902.

"Our flag is the most important symbol of our national identity and I believe that this is the right time for New Zealanders to consider changing the design to one that better reflects our status as a modern, independent nation," he said.

He has insisted there was no presumption the existing flag would be changed, although almost all of the material released today is dedicated to the developing of alternatives and the implications for change.

A question-and-answer sheet from Mr Key advises those opposed to changing the flag that they can vote against it in a second referendum.

While a cross-party panel of MPs will be formed next month and nominate a committee of well-known New Zealanders to help select the options to put to the public, the public campaign itself will not begin until April next year.

The first vote will be held in November, with the issue decided in April 2016.

"The timetable proposed for the flag consideration process is very detailed and allows little room for slippage,"  a cabinet paper warned.

The process will cost more than $NZ25 million ($A22.4 million), mostly related to the cost of the referendums and associated publicity.

Mr Key said this reflected that the issue would be taken seriously.

"I think in the end, you have to say well, what price do you put on democracy where people genuinely have their say on a matter that is actually important?" he said.

Fairfax NZ