Cabinet have agreed in principle to quarantine-free travel in the first quarter of 2021.
Prime Minister Jacinda Ardern said officials were working on contingency plans in the event of an outbreak.
The decision is dependent on Australia's agreement and no major change in circumstances in either country.
Australian federal health minister Greg Hunt said his government was keen on the idea.
"We're ready to implement from our side as soon as New Zealand's ready. It's the first step on a return to international normality."
University of Melbourne epidemiologist specialising in public health professor Tony Blakely told Morning Report Australia was working on a potential 'hot-spot' definition for the different states, but could not reach a conclusion and it had fallen by the wayside now.
New Zealand would be looking for a national-level approach, he said.
If that did not happen, then New Zealand would have to look at which states and territories to be in a bubble with "if there's another resurgence somewhere".
It would impact advance bookings, he said, but people might start to book about two weeks prior to travel.
"Welcome to Covid normal, that's the reality anywhere you live in the world, particularly for a bigger country like Australia where there's just more people, there's more governments and where there will be occasional incursions and outbreaks - that will happen, it's the reality."
He said it was about moving with the times and stated the benefits of a bubble for New Zealand.
"The three benefits you get out of this are reunification of family and friends, two is increasing your tourism, and three is business opportunities."
He said the major risk for both countries was for Covid coming from the Northern Hemisphere - from countries like UK, Spain, and US.
"There is a risk that the virus will pop into New Zealand from somebody coming from Australia but it is much less than ... somebody coming from the UK for example."
University of Otago epidemiologist professor Michael Baker told First Up most states in Australia were free of community transmission for longer periods than New Zealand.
He said Australia was taking a similar "elimination" approach and the Pacific Islands had gone a step further and "excluded" the virus completely since the start of the year.
"Now is the time to be looking at quarantine-free travel with Australia and some Pacific Islands."
Baker said pushing out the travel bubble to 2021 was sensible because there was a higher risk of importation as the pandemic was "getting more intense in the Northern Hemisphere" and would continue for a few more months till the vaccines were available.
And it would be harder to manage an outbreak over the summer here, he said.
If there were an outbreak on either side of the border when the bubble was in operation, Baker said it would need to be instantly closed, only allowing those coming through MIQ.
"The Western world has made a horrible mess of managing this pandemic right from the beginning, and so now they're really stuck with this difficult situation where they have to go in and out of lockdown, now the only thing fo them would be the roll-out of very effective vaccines."