The airline announced its plan on Wednesday, after selecting BETA's ALIA battery-powered plane for commercial flights in 2026, initially transporting cargo.
Chief executive Greg Foran said the electric plane would give the company insights into how to operate other alternative aircraft and deal with the "wicked" challenge of cutting carbon emissions.
Air New Zealand's announcement comes after Qantas committed to using 10 per cent sustainable aviation fuel in its fleet by 2030, and both Qantas and Virgin promised to reach net-zero emissions by 2050.
Mr Foran told AAP the airline had chosen the electric, conventional take-off and landing aircraft after an 18-month evaluation through its Mission Next Gen Aircraft program.
The five-seater plane, capable of flying up to 270km/h, would be used to transport goods for New Zealand Post, he said, travelling up to 150km between two domestic airports yet to be chosen.
"This is not the long-term solution for replacing our turboprop fleet but it helps us start to learn how to operate alternative propulsion aircraft," he said.
"This gets us on the learning curve to understand what we need to do with the Civil Aviation Authority, what do we need to do internally, what do we need to do with airports and other partners."
Air New Zealand boss Greg Foran says the aviation industry is in for an "exciting decade or two". (Phil Walter/AAP PHOTOS)
Mr Foran called cutting emissions from air transport "a wicked problem" facing the industry and said the electric aircraft would not yet replace planes in its fleet but help inform future low-emission choices.
Larger electric planes capable of seating between 50 and 70 passengers, he said, could be used on domestic routes unless another technology offered better opportunities.
"When the technology develops further, it may not just be electric (aircraft) but it may end up being green hydrogen electric or hybrid," he said.
"You get the feeling that the aviation industry is in for a very exciting decade or two."
BETA chief executive Kyle Clark said the US company welcomed Air New Zealand's decision to "change the broader aviation landscape" and cut air transport emissions.
The company's electric planes have also been tested by US mail carrier UPS and the US Air Force.
Other solutions, such as sustainable aviation fuel made from agricultural waste, will be used to reduce carbon emissions from air transport on longer routes, though concerns have been raised about its cost and availability.
Qantas and Virgin Australia have committed to using the biofuel to reduce emissions and a CSIRO report predicted sustainable aviation fuel could power as much as 90 per cent of all Australian domestic flights by 2050.
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