New Zealand's army is to buy a fleet of new British-made Pinzgauer four-wheel drive vehicles in an order that could ultimately cost $NZ110 million, according to the Dominion Post newspaper.

According to the paper, defence minister Mark Burton said the government had approved the purchase of 188 light operational vehicles to replace obsolete Land-Rovers [delivered in the 1980s]. A further order of 133 vehicles was likely to follow after tests on armoured variants of the Pinzgauer, the report added.

The Dominion Post said the Pinzgauer - an Austrian-designed Volkswagen-powered vehicle made in Britain by Automotive Technik - was chosen ahead of the United States-made Humvee.

Defence minister Burton reportedly said the order was for 95 general service vehicles, 57 command and control vehicles, 13 special operations vehicles, 15 shelter vehicles and eight ambulances.

The Pinzgauer is bigger than a Land-Rover and can carry up to 12 people including a driver, the Dominion Post said.