The Ministry of Health will get an additional $2 million to reduce smoking rates and fund safe sleep devices - also known as pepi pods or wahakura. The pods have been found to help prevent SUDI, especially in Maori and Pacific families, where co-sleeping is common.
The Government originally opposed funding sleep pods, but changed its position last year after a Herald investigation found that it was acting against expert advice and coroner recommendations.
While it will fund the devices, the Government is not explicitly endorsing them and its advice is still for a baby to sleep in a separate bed.
"Although evidence shows it's safest for a baby to sleep in a bassinet or cot ... we know that in some families this doesn't happen," Coleman said.
"That's why we're supporting these families to have their baby sharing a bed as safely as possible."
The Green Party has championed the idea of providing wahakura to every newborn, at an estimated cost of around $12m a year. Co-leader Metiria Turei welcomed the Government's move, but said the pods should be available to all families, not just the most at-risk ones.
The Greens' policy is a stripped-back version of the Finnish "baby box", which provides families with clothes and bedding for a year and has been credited with significant gains in neonatal health.
Under the government scheme, Coleman said the sleep pods would be provided to "families identified as needing them in the baby's first year of life".
"We expect every family who needs this form of assistance will be identified and supported to keep their baby safe during sleep," he said.
"More needs to be done to address our SUDI rate, and by adopting this evidence-based approach it's hoped that real and meaningful change can be achieved."
District health boards already provide sleep pods to families, but the government funding will make them available nationwide.
Northland DHB, which has a higher proportion of Maori patients, gives out around 180 of the pods a year. The initiative has been partly credited with reducing the SUDI rate in the region from 10 a year in 2013 to three a year.
The expert review released yesterday said there was one stillbirth for every 196 births in 2015 in New Zealand. This was a significant improvement on 2007, when there was one stillbirth for every 178 births.
Perinatal and Maternal Mortality Review Committee chairwoman Sue Belgrave said initiatives to improve pregnancy care probably contributed to the reductions in deaths.
"These include reduced rates of smoking among pregnant women, better and earlier access to antenatal care so that risk factors such as small babies and maternal diabetes can be detected and managed, and there was a decrease in births among teenage women suggesting improved access to contraception."
- additional reporting Sarah Harris