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Smokers can puff legally at indoor bars and cafes with a battery-powered "electronic cigarette" because its nicotine hit comes in a vapour.
The Ministry of Health has confirmed that using the device would not breach the Smokefree Environments Act, which extended workplace smoking bans.
Lyttelton health researcher Dr Murray Laugesen is involved in safety tests of the product - which has a glowing tip to emulate real cigarettes - for the China-based company that makes it.
He said the company would decide after the safety tests and a clinical trial in Auckland early next year whether to apply to sell it in New Zealand. The ministry had ruled it would need to be registered as a medicine first.
The Ruyan e-cigarette device is available on-line for US$208 ($270) - the price of about 22 packets of Holiday 25s - and the nicotine inserts cost around $2 a day.
Auckland University's clinical trials research unit will next year test the device, with funding from the maker, to see how quickly it delivers nicotine into the smoker's bloodstream and whether it reduces cigarette cravings and withdrawal symptoms. It will be compared with a nicotine inhaler and placebo versions of both devices.
Researchers hope in future to test the e-cigarette's effectiveness in helping to quit smoking, but it is also recognised some people might use it long-term as a tobacco replacement.
"It may have a role for a small number of people who want to continue to be addicted," said the research unit's associate director, Dr Chris Bullen.
"This is a way of making it much less harmful than inhaling the byproducts of [cigarette] combustion."
It also posed no second-hand smoke risk.
The ministry chief adviser on public health, Dr Ashley Bloomfield, said that as the e-cigarette did not ignite or create smoke, it was not covered by the smokefree act.
"Given the lack of research on this product to date, it is unclear what role, if any, it might play in reducing smoking in New Zealand."
The tobacco control community is divided over the use of harm-reduction methods for smokers who seem unable to quit despite numerous attempts.
Manfred Neuberger, professor of preventive medicine at the Medical University of Vienna, said in the British Medical Journal: "Products like Ruyan which look like cigarettes will undermine the control of smoking bans and make it impossible to denormalise smoking in public."
