The team is being assisted by the Government's Airspace Integration Trials Programme, which aims to support the adoption of new aviation technology safely into the existing transport system.
Research, Science and Innovation Minister Megan Woods said the spray could help make fog delays a thing of the past.
Woods told the Herald that Pyper was not receiving any financial backing, however. Instead, the partnership would see the startup receive logistical support from MBIE and other government agencies.
Pyper Vision founder and CEO Emily Blythe told the Herald, "We are not putting timelines forward as we can only move as fast as the regulator ... [But] we've been around for five years and completed over 200 fog dispersal tests during this time across New Zealand and Australia.
"During this time we have shown [our] absorbent effectively mimics nature and can clear a critical area of sky in as little as 10 minutes, allowing safe take-off and landing to resume. It's a simple idea that could solve a multibillion-dollar problem."
Blythe added, "Ultimately our goal is to go global. Pyper Vision is aiming to test and use its technology in airports throughout New Zealand and then overseas."
In 2018, Blythe won a $700,000 investment at an Icehouse Ventures pitch competition for entrepreneurs under 30. Today, the Auckland VC outfit holds a 26 per cent stake in her firm.
Fog delays at airports cost exporters, airlines and airports significantly, and result in more carbon emissions because of extra fuel spent on diverted flights, as well as causing significant frustration and inconvenience to travellers, Woods said.
"Pyper Vision is developing a solution that disperses a safe water-absorbing environmentally-friendly product via drone ... so that pilots and air traffic controllers can operate safely."
Blythe said fog accounts for nearly 30 per cent of weather delays at airports and is difficult to plan for, making a way to clear it invaluable.
Its next steps include more testing at airports throughout New Zealand, with the hopes of later marketing the technology internationally.
Woods said New Zealand's emerging aerospace sector is "highly innovative and research and development intensive".