New Zealand state homes will soon be required to be kitted out with woollen carpets

It's part of a move from the Government to bolster Kiwi wool production.

Finance Minister Nicola Willis is welcoming news of Kainga Ora's updated supplier agreement, which she says was only made possible after the agency re-opened its previously nylon-only carpet tender process.

And Willis is calling on private businesses to follow the Government's lead, saying when wool was put back on the table ... it more than held its own, delivering value and quality.

Kainga Ora is expected to fit out about four and a half thousand homes in the next three years.