The current flag design of a Union Jack and Southern Cross was first used in 1869 and formally adopted in 1902.
Mr Key labelled it a relic from New Zealand's colonial past and had previously said he would prefer a new design featuring the silver fern on a black background - a design used by the All Blacks and other national sporting teams.
"We want a design that says New Zealand, whether it's stitched on a Kiwi traveller's backpack outside a bar in Croatia, on a flagpole outside the United Nations, or standing in a Wellington southerly on top of the Beehive every working day," he said.
Mr Key had made an election promise to hold a referendum before 2017 if re-elected and said yesterday that he would bring it forward.
He had outlined a plan for a cross-party group of MPs to recommend the best process for referenda and a steering group to ensure the public had the opportunity to engage in discussion on the flag, and submit designs.
Mr Key suggested a two-stage referendum; first a vote for the best alternative flag from three or four options. Then, the winning design would run off against the existing flag.
Critics argue that the present flag is easily confused with those of other former British colonies, including Australia.
But supporters say it would dishonour the memory of New Zealanders who had fought and died under the flag if the design was changed. The Returned Services Association had said it would oppose any change.
National president Don McIver, who could not be reached yesterday, had earlier said the flag held a special status for soldiers who had fought under it and it should not bechanged.
A Herald-DigiPoll survey conducted earlier this year revealed a majority of New Zealanders were against changing the flag.
However, if a new flag was chosen through a public referendum then the silver fern was the most popular design.
Asked if they felt the time had come for New Zealand to design a new flag for itself, 52.6 per cent of the respondents said "No" and 40.6 per cent answered "Yes".
Process for change
• Cross-party group of MPs to recommend best process.
• Steering group to ensure public has opportunity to engage in discussion, submit designs.
• Stage one: vote for the best alternative flag from three or four options.
• Stage two: winning design would run off against the existing flag.
For more on the campaign to change the flag, go to: tinyurl.com/nzhflagdebate.
