NZ Post has announced plans to build a $170 million "super depot" in the capital to boost its parcel processing capacity.
The building is due to open in the northern suburb of Grenada in 2022 and will create about 350 jobs during construction.
The depot will have a 10,440 square metre processing floor - about the size of a rugby field.
NZ Post also plans to spend $18m in technology that will sort and scan parcels at a much faster rate.
NZ Post chief executive David Walsh said customers want complete visibility of where their parcel is at all times of its journey and this technology will improve its ability to do this.
Walsh said NZ Post is forecasting significant growth in the amount New Zealanders will buy online in the next decade and that was before the explosion in online shopping during the Covid-19 period.
"Last year online shopping in New Zealand grew 13 percent with almost 50 percent of adult New Zealanders now shopping online, and we are expecting this growth to continue," he said.
The new depot is part of NZ Post's 10-year plan for parcel growth.
The $170m investment will increase parcel processing capacity from 95m parcels today to 190m parcels.
The investment programme will also include a new processing centre in Auckland, due to open in 2023 and an upgrade to the southern operations centre in Christchurch in 2022.
Associate Minister for State Owned Enterprises Shane Jones was present at the ground-breaking and blessing ceremony this morning in Grenada.
He said posties were an essential service during the level 4 lockdown to deliver essential items and they have continued to work through the resulting massive demand for e-commerce.
"New Zealanders will be aware of the issues that surrounded the ability of NZ Post to deal with the huge surge in parcel post during lockdown," he said.
During the lockdown period, NZ Post received more than 3.5 million parcels in the first two weeks of alert level 3, but NZ Post has not planned for that quantity of parcels until 2023.
Jones said the new state-of-the-art depot will allow NZ Post to process parcels faster and more efficiently.
"This investment is good news for New Zealand businesses who are looking to grow their e-commerce presence or are already successful in this space, and for the customers who use those services," he said.