The new effort, just awarded an $11.6m grant from the Ministry of Business, Innovation and Employment, will put those magnets into a new type of electric propulsion for satellites or other spacecraft.
Once they reach orbit, satellites often need to change their velocity, either to adjust their orbit, point themselves in the right direction, or stay in the right place – and that's where this new system could offer a literal boost.
"Electric propulsion uses a combination of electric and magnetic fields to create a force on ions which propels the ions from the spacecraft at very high velocities," explained the institute's director, Associate Professor Nick Long.
"The advantage is that the energy can be harnessed from solar panels and then transferred to the ions, unlike chemical propulsion, where you take an explosive fuel with you and burn it to release energy."
And by using superconductors, the fully-electric thrusters would be more powerful for their weight.
Long said space travel had changed much since humans first set foot on the Moon, half a century ago.
Many private companies were now operating in space, such as SpaceX with its powerful Falcon Heavy rocket, and New Zealand's own Rocket Lab, with its nimble Electron rocket.
Many of the satellites being launched could benefit from the new Kiwi tech, he said, but there was much work to do at ground-level first.
"We have to design the right combination of electric and magnetic fields to optimise the efficiency of the thruster," he said.
"This can be designed by computer modelling - but the modelling is complex and needs to be validated with experiments."
The actual experimental testing of the thruster would also prove difficult.
"The amount of force created is very small. This type of engine is only useful for moving objects around which are already in space - it doesn't produce the magnitude of forces which can lift a rocket into orbit."
And then, his team had to figure out how to keep the superconductor magnet cold while in space, without this churning through too much energy.
"We have already been working on this problem and have some ideas on how to do this efficiently," he said.
"Once we have a good idea of the design of our system we will build and test the system in the laboratory."
The next step would be building a version which could be launched – likely on a small CubeSat sent into space with RocketLab.
The ultimate goal was to innovate a new generation of propulsion systems that could efficiently drive satellites and spacecraft.
"There are many reasons propulsion systems are needed, most satellites need to adjust their orbits or orientations during their lifetimes, including at the end of lifetime to de-orbit or go to a 'graveyard' orbit," he said.
"Some are launched into one orbit, but then slowly propel themselves to a different orbit to carry out their function - this is often the case for geosynchronous satellites.
"Also this is the case for the constellations of satellites being launched for GNSS or internet services."
Not only did the project want to prove the proposed system could work at small scale, he said, but to understand if it could be applied at larger scale.
While it would most likely be useful for small satellites, Long expected it could also be useful for future interplanetary travel.
"It is generally too inefficient to use chemical propulsion, for example, to go to Mars, stop at Mars, and then come back," he said.
"Electric propulsion means much of this energy can come from the Sun. You don't have to lift all this energy in the form of fuel off the Earth's surface."
And there were many other potential uses for superconductors in space.
"For example, you can create magnetic brakes which would help slow a spacecraft down as it enters a planet's atmosphere - including Earth's - or magnetic heat shields, which would deflect heat away from a spacecraft, and enable reusable vehicles for re-entry."
If the project was able to show the superconductors could be efficiently used in the thruster, Long said these seemingly far-out applications could be more possible.
"To do science-fiction like stuff in space, we have to use the most-high-performance materials available - and for creating magnetic fields, this is superconductors," he said.
"Our job is to take the fiction out of the science fiction."