New Zealand has agreed to resettle 150 refugees a year who arrive in Australia.

Julia Gillard and New Zealand prime minister John Key announced the deal on Saturday and said the annual intake of refugees would form part of New Zealand's annual quota of 750.

Refugee deal ... Julia Gillard and New Zealand Prime Minister John Key in Queenstown. Credit:Getty

They would replace refugees referred by the United Nations High Commission and be subject to Australia's offshore processing legislation.

The announcement came after talks in Queenstown, New Zealand today. It mirrors a similar deal done between New Zealand and Australia in 2001 when former prime minister Helen Clark helped end a diplomatic standoff after a boatload of more than 450 refugees sank off Christmas Island. New Zealand agreed to resettle more than 130 of the asylum seekers after they were rescued by the Norwegian freighter, the Tampa.