The problem of block obsolescence for the Leander-class ships was alleviated in part by the life extensions to WELLINGTON and CANTERBURY. But in parallel, the Navy sought new surface combatants. In 1987 the Government approved that the RNZN should link in with the Australian new combatant project, which became known as the Anzac Ship Project.
The project awarded the prime contract for eight new Australian ships to Tenix shipbuilders, in Williamstown, Victoria. In September 1989 the New Zealand Government agreed to buy two ships as part of the project and in November 1989 a treaty was signed with Australia for the acquisition of two Anzac-class frigates.
The project provided for significant New Zealand industry involvement, which had previously been denied for Australian defence contracts under the 1982 CER agreement. As a result of the Anzac Frigate Treaty, New Zealand industry gained approximately $800 million worth of work, from a total project cost for New Zealand of $1,200 million (in 1989 dollars). More importantly New Zealand firms gained an important entry to the Australian and international defence markets, with a number of manufacturing contracts flowing out of their Anzac frigate work.
The two ships, named TE KAHA and TE MANA, were delivered and commissioned in 1997 and 1999, replacing SOUTHLAND and WAIKATO respectively. SOUTHLAND was sold for scrap in 1995; WAIKATO was sunk in December 2000 off Northland as a dive wreck, near the former TUI.
The 1997 Defence White Paper set a policy of a three ship combat force, so altogether with CANTERBURY the two new frigates form the combat ships of the RNZN in the 21st Century. WELLINGTON had stopped running during 1999 and was decommissioned the following year.
The Anzac Ship Project allowed New Zealand the option of ordering two more ships, if a decision was made by November 1997. However the government of the day allowed that option to lapse, and efforts during 1998-1999 to gain political support for a third Anzac-class frigate, possibly leased from the RAN, were also unsuccessful. In early 2000 the newly-elected Government announced it would not consider a third frigate.