The move is part of a raft of proposals being considered by lawmakers.
They include a reduction in the level of nicotine allowed in tobacco products, prohibiting filters, setting a minimum price for tobacco, and restricting the locations where tobacco and cigarettes can be sold.
But the government is also considering a gradual increase of the legal smoking age which could effectively mean anyone born after 2004 would be banned from every buying cigarettes.
In a consultation document, the government said: “A smoke-free generation policy would prohibit the sale, and the supply in a public place, of smoked tobacco products to new cohorts from a specified date.
“For example, if legislation commenced on 1 January 2022, then people younger than 18 years at that time or those born after 1 January 2004 would never be able to lawfully be sold smoked tobacco products.”
Announcing the plans on Thursday, Dr Ayesha Verrall said: “We need a new approach.
“About 4,500 New Zealanders die every year from tobacco, and we need to make accelerated progress to be able to reach that goal [of smoke-free 2025].
“Business-as-usual without a tobacco control program won’t get us there.”
The proposals have been criticised by right-wing political party ACT, who said one of the restrictions being looked at - lowering the amount of nicotine in cigarettes - could end up negatively affecting working-class smokers as they would need to buy more cigarettes in order to get the same hit.
“New Zealand smokers who can least afford it will spend more on their habit and in turn do harm to those around them if the government mandates lower nicotine,” the ACT’s social development and children spokesperson, Karen Chhour, said in a statement.
Convenience stores, corner shops and service stations have also shared concerns over banning tobacco sales from their businesses.
New Zealand has a population of about five million people and it’s estimated that about 500,000, or one in 10 smoke daily.
Smoking accounts for one in four cancer deaths in New Zealand with MÄori people worst affected.
Cancer is the leading cause of death for MÄori women and the second leading cause for MÄori men.