After that a further 500 will come in by mid 2018, totalling 750.
The first 100 refugees will arrive in three groups in January, March and May next year. The UN's refugee agency would screen them as was done under the quota.
Mr Woodhouse said the cost of the extra refugees would come to about $48.8 million over the three years. The Government currently spends $58 million annually on refugee re-settlement.
Mr Woodhouse said the extra 600 places above quota would be allocated even if the quota changed following a review in the middle of next year.
The Government is likely to be criticised for failing to bring in the refugees more quickly - Labour favours bringing in 750 in one year.
Mr Woodhouse said it was an appropriate response: "Official advice is an immediate intake of any more than the extra 100 announced today for this year could put unreasonable strain on services, affecting the quality of resettlement outcomes for all refugees in New Zealand."
He said there were practical considerations in the ability to provide housing, translators and health services which had to be taken into account.
Mr Woodhouse said it was a similar step to former National Prime Minister Jenny Shipley's actions in 2000 in which 400 ethnic Albanian refugees fleeing ethnic cleaning in Kosovo were accepted into New Zealand above the quota.
Those refugees also arrived in three groups of 150 each to ensure refugee services were not put under undue strain.
Prime Minister John Key has defended the decision not to bring it all 750 Syrian refugees in one year, saying it was important to bring in the refugees at a pace New Zealand could handle to ensure resettlement was successful.
The Government had sought advice on issues including housing and health. He said the bulk of the refugees would go into Housing NZ homes in Wellington, partly because there were more homes available than in Auckland.
Most of the 83 Syrians accepted under the quota last year were in Wellington so there was already a community there.
He said the Government's decision situation in Syria was heartbreaking and had "visibly worsened" in recent days and New Zealanders' concerns reflected that.
Increasing the refugee intake was part of doing the job as a responsible global citizen.
Mr Key noted that the church community had out their hands up to help and said there was a way the community could help, either by volunteering with the refugee resettlement services or by donations.
He said people should contact the Red Cross if they wished to help. The most important thing was to make the Syrians feels welcome and safe.
Mr Key said many of the refugees wanted to return to Syria when the conflict ended.
He said he was reluctant to permanently increase the quota until after a thorough review next year.
Increasing it to 1000 could leave the Government without the flexibility to provide for emergency intakes above that quota.
"It doesn't mean you can never do more or increase that capacity, but at the moment this is stretching the system."
Any further would require an expansion of the Mangere resettlement centre, at which all new refugees spend their first six weeks.
Labour leader Andrew Little said the party would now pull its Emergency Humanitarian Response Bill, which would allow an additional 750 refugees into New Zealand over the next year.
"We are pleased that the Government has clearly now moved its position...they have indicated they are not going to allow my bill to go through. This is not about game-playing and points-scoring, so I won't be seeking leave to table my bill.
"But I will be urging New Zealanders to support the efforts to increase the permanent quota. We will continue to support the Green Party bill in that regard - that is the next most important thing that we can do."
Mr Little said there was no reason why the Government could not bring forward the review into the refugee quota, currently scheduled for next year.
The Greens will tomorrow seek leave of Parliament to introduce Denise Roche's members bill, which would lift the quota from 750 to 1000 refugees per year.
That move will be blocked by National. Green Party co-leader James Shaw said the Government's announcement today was welcome news and better than nothing.
However, he rejected Mr Key's argument that taking more could push an already stretched support system to breaking.
"The system is stretched because the Government has been chronically underfunding it. It is a matter of prioritisation."
Mr Shaw said it was clear that National had bowed to public pressure on the refugee issue, and he hoped they would have a change of heart about not increasing the quota.
United Future leader Peter Dunne said today's announcement was a positive first step, "but the next issue is the quota and that has to be increased as well on a long-term basis".
He said the Government should look at setting up a taskforce to examine the costs involved in settling refugees.
"In the past week we have had 20 mayors, we have had major churches...all come out and say they could play a role in helping this resettlement process take place...if you pull all of that together, you can utilise that capacity...it is not just the Government's role."
The Government has also announced a further $4.5 million in aid funding to help refugees displaced by the conflict in Syria.
The funding would go to refugee camps in Turkey, Lebanon and Jordan and delivered through partnerships with those countries, UN agencies and non-governmental organisations which were helping with the camps.
Foreign Minister Murray McCully said the total aid New Zealand had given for refugees affected by fighting in Iraq and Syria was $20 million.
New Zealand's aid funding had gone toward schools in the camps, and health and education support as well as to support the International Committee of the Red Cross in Syria.
"One of the most effective ways we can help address this humanitarian crisis is by ensuring there are facilities to cater for refugees in countries neighbouring Syria and that these refugee communities are afforded adequate protection."
Mr McCully said while humanitarian assistance was essential, the top priority should be on finding a solution to the conflict in Syria.
"Many Syrian refugees wish to return home once it is safe, so finding a political solution to the civil war in Syria needs to be the international community's top priority.
New Zealand is using its position on the United Nations Security Council to call for action and we continue to urge all members to work together to find a way of ending the violence."
Immigration officials will travel to Lebanon in October and again in December to screen the first groups of refugees selected for re-settlement in New Zealand.
The refugees will first be screened by the UN refugee agency, the UNHCR. However they must also meet Immigration NZ's requirements and undergo security and health checks.
The Security Intelligence Service also does security checks on those selected.
A spokeswoman for Mr Woodhouse said that was to ensure they were not a security risk of 'character of concern' before they are allowed in.
