The emergency legislation will be introduced when Parliament resumed on May 6, and will be passed under urgency.
"I'm expecting it to be passed that particular week and to take effect pretty much immediately afterwards," Mr Dunne said.
This meant there would be no psychoactive substances for sale in New Zealand for "some considerable amount of time".
There are currently 150 outlets selling legal highs nationwide.
The Psychoactive Substances Act required synthetic drug manufacturers to prove their drugs were low-risk before they could be sold.
But a Ministry of Health testing regime and several other regulations were not yet in place.
In the interim, drugs which had temporary approval from an expert committee were permitted to be sold.
Forty-one products are on shelves at present, compared to around 300 before the bill was passed.
"I think that the reason we didn't include those 41 products initially was that they hadn't been identified as problematic," Mr Dunne said.
"The public concern of recent weeks has led me to revisit that question and I've been working on the legislation for some time now.
"In effect what this will mean is that there will be no products until such time as the new regime takes effect and they've been able to be tested."
The ministry's testing regime is expected to be similar to pharmaceutical drugs and could cost manufacturers more than $1 million per product to get drugs approved.
Labour leader David Cunliffe was expected to announce in Mangere tomorrow that Labour would pull all products from shelves if elected.
This policy would be made redundant by Mr Dunne's emergency bill.
Labour would also ban the use of animal testing to prove products were low-risk, which would make it even more difficult to get products approved.