The Government is promising any changes to the Foreshore and Seabed Act will not undermine public access to New Zealand beaches.
National and the Maori Party announced the terms of reference for the review on Wednesday, which is expected to be completed by the end of June.
An expert panel will hear submissions from iwi and the public in April and May.
It will comprise former High Court Judge Edward Durie, lawyer and academic Richard Boast and the Dean of Christchurch Polytechnic's faculty of Maori Hana O'Regan.
Maori Party co-leader Tariana Turia says it is a great day for Maori but the public have nothing to fear from the review.
She says the issue is about restoring iwi's mana and authority over the land and the sea and public access to beaches will be retained.
Prime Minister John Key says he is open to repealing the law - if that is the recommendation of the review. However, he has also guaranteed that public access to beaches will not be compromised.
Mr Key says the review is another example of National honouring its supply and confidence agreement with the Maori Party.
ACT Party leader Rodney Hide is pleased at the review. He says the previous Government had created difficulties by introducing the law rather than allowing the courts to determine customary rights of iwi over the foreshore and seabed.
The Ministry of Justice website says the Foreshore and Seabed Act received royal assent on 24 November 2004. Certain provisions of the act came into force on 25 November 2004 and the remaining provisions came into force on 17 January 2005.
