The company's offer was not known, but the land was valued at just over $70 million. It could be used for sheep, beef and dairy farming.
Conservative Party leader Colin Craig revealed the deal at a public event because he felt foreign purchases of valuable land was an election issue that should not be kept secret.
"This is iconic, a one-off property. These things are rare in New Zealand. I think it would be a tragedy to lose it to foreign business interests and I think New Zealanders think the same."
Pengxin publicly confirmed its plans after Mr Craig's criticism of the secrecy of the deal.
Mr Craig said: "There's no doubt in my mind that if we end up with a predominantly National Government with no one holding them to account this'll fly through."
New Zealand First leader Winston Peters said the sale was not in New Zealanders' long-term interests.
"[National] just don't care - they're letting anyone and everyone buy our houses, land and businesses."
Asked for comment, Associate Finance Minister Jonathan Coleman's office said it was a matter for the OIO at this stage.
Prime Minister John Key has previously emphasised that less than 1 per cent of New Zealand farmland was in foreign ownership and said the OIO's criteria did not need to be stricter.
The Crafar farms sold for $200 million in 2012 and the sale was the largest foreign purchase of New Zealand land by value.
Mr Craig's announcement that Conservatives would block foreign purchases of farmland or commercial blocks was a further bid for New Zealand First's centre-right voters. It was revealed at a Grey Power meeting, which is typically Mr Peter's home turf.
New Zealand First, along with Labour and Greens, have already announced plans to restrict substantial sales of land to overseas buyers.
Labour would also restrict sales of new properties to foreigners.
These parties have been accused of racism because their policies were initially prompted by the Chinese company's bid for the Crafar farms.
