The University of Otago will raise the cap on international student numbers from 12 per cent to 15 per cent from next year as it looks to boost international enrolments.
University international pro-vice-chancellor Prof Sarah Todd said lifting the cap would allow more than 500 extra international students to study at Otago.
"We are fully committed to the new 15 per cent cap and at the same time we are also aware of the need to deliver a quality education and lifestyle to every overseas student who comes to Otago and Dunedin. Each student must feel welcomed and valued," she said.
Tertiary Education Minister Steven Joyce said the move was a "step in the right direction".
"Lifting the number of international students in Dunedin will bring increased revenue to the university and allow it to invest more in teaching and research quality for the benefit of all students.