The government says a new $730 million fund will help iwi build more than a thousand new houses.
The programme - called Whai Kāinga, Whai Oranga - combines money announced in this year's budget with $350 million from the Māori Infrastructure Fund.
Associate housing minister Peeni Henare said it will allow about 1,000 new homes to be built, as well as repairs to be made to 700.
In a statement, Henare said iwi-led developments were key to helping address the supply of houses
"Māori were clear that they wanted the government to create space for Māori-led local solutions - especially when it came to delivering housing at scale," Henare said.
Māori have the lowest home ownership rates in the country, and the gap is widening as the crisis grows more acute.
Applications for the fund open next week (20 October), through the Ministry of Housing and Urban Development and Te Puni Kōkiri.
Māori development minister Willie Jackson, in the same statement, said it will invest in both small-scale projects including papakāinga, and larger iwi-led developments.
No deadline was given for when the government expected the houses to be built.