The removal of tariffs on milk powder means all New Zealand dairy products can now enter China duty-free.

This deal was part of the New Zealand-China Free Trade Agreement, which was first negotiated in 2008.

Trade and Agriculture Minister Todd McClay said it was a landmark day.

"It's really good news not only for dairy farmers but [also for] the New Zealand economy.

"$350 million worth of additional revenue delivered to New Zealand as a result of the FTA finally entering into force, it's a day for celebration, but still a [lot] more work to do ... a lot more we can export."

Federated Farmers president of Marlborough Evan White said the removal of tariffs would benefit New Zealand communities.

Although it was always on the cards as part of the Free Trade Agreement with China, it had probably slipped under the radar and "snuck up" on most farmers, he said.

"It puts more money back in the pockets of the dairy farmers, which in turn will get spent in the town, in the community, in the country."

White hoped removing the tariffs would have a positive effect on the dairy payout and farmer morale.

McClay said China was a valuable trading partner for the country.

"They take about $8 billion worth of dairy products from New Zealand but across the primary sector they are big importers.

"The government is looking to build on that relationship but also diversify, so we can sell more to India and the EU and other places.

China was also responsible for a lot of jobs in New Zealand's economy, said McClay.

New Zealand's annual dairy exports to China have averaged 1.4 million tonnes each year over the past three years, around half of which was milk powder.

FTAs currently in force covered two-thirds of New Zealand's exports.

This story was originally published by RNZ