The Government's drug-buying agency has extended funding for an HIV treatment to include those at high risk of infection in a bid to reduce transmission rates.

From March, Pharmac will fund the drug Truvada - which is already available to those with HIV - for the prevention of the retrovirus as well, making New Zealand one of the first countries in the world to do so.

The agency estimates about 4000 people at high risk of contracting HIV will be eligible for the treatment, which has the potential to almost completely eliminate the risk of infection.

Up to now, those who wanted to take the drug for prevention - known as pre- exposure prophylaxis - had to pay about $1000 for 30 pills or look for generics overseas.

It will now be available at the cost of a normal prescription.

"Together with safe sex practice, early diagnosis and access to treatment, we expect that (it) will significantly reduce HIV transmission rates in New Zealand," Pharmac chief Sarah Fitt said.

The agency has been working on the proposal with the New Zealand AIDS Foundation since last year.

Foundation executive director Jason Myers said the move would make an "enormous difference".

"It's a giant leap forward for our ambitious goal of ending new HIV transmissions in New Zealand by 2025," Dr Myers said.

"We are also extremely heartened to see that Pharmac took on board suggestions to expand funded ... access to include transgender men who are at high risk of HIV."

Those receiving the new pre-emptive treatment would be required to undergo regular HIV tests, Pharmac said.

"Condoms continue to be the primary and recommended method of preventing transmission of HIV and other sexually transmitted infections," Fitt said.

"Condoms are fully funded on prescription and are highly effective, but rates of HIV infection are still increasing in New Zealand."

- NZ Newswire