The Cook Islands government will spend $US1.6 million on a new cargo ship for the outer islands.
The Cook Islands News reported the country's only cargo barge, the 46-metre Layar Mas, is being sold to a buyer from the Bahamas.
The barge cost the company Cook Islands Towage about $US780-thousand in 2016, and has provided a much-needed service to communities on outer islands.
It also shipped government cargo from Rarotonga for infrastructure work on southern and northern group islands.
The Deputy prime minister Mark Brown said with the current barge being sold, the government was seeking to procure a new vessel.
With approximately $US11.7 million worth of outer islands capital projects this year, appropriate transport is required to ship materials to the outer islands, he said.
"For many, many decades now, our country, our government has chosen to rely on the private sector to provide our shipping services and it's time for us to change the way we do business," Mr Brown said.
"Sometimes we cannot rely on the private sector to carry the capital cost of an investment in a ship which is very difficult to run to make it commercially viable.
"In the interest of providing efficient services particularly to our outer islands, the government has made a commitment to support the purchase of an appropriate vessel like a barge."
Mr Brown said a bulk cargo shipping vessel was needed to provide regular, affordable and reliable cargo shipping services between Rarotonga and the outer islands, or Pa Enua.
The vessel would also support the implementation of the government's planned Pa Enua infrastructure projects over the 2019/20 estimates and forward budget period, he said.
Cook Islands News reported the Opposition's deputy leader, Terepai Maoate Jr, raising a question over who would oversee the operation of the new vessel.
Mr Brown said the government would put the incoming barge up for charter to an appropriate company to manage and run on a professional basis.
"And of course there is a proper process that we must go through to ensure that proper procedures are maintained as to who is hired or chartered to operate the barge service," he explained.
Mr Brown said he expected the procurement process to start after the passing of the Budget, with the purchase to be completed within the next three months.