The design beat four other contenders in a nation-wide referendum, according to preliminary results released by the New Zealand Electoral Commission.
Simply titled "Silver Fern (Black, White and Blue)", the design will go head-to-head with the existing flag in a second referendum in March next year.
"While this is a preliminary result, New Zealanders can now turn their attention to deciding whether to keep the current flag, or replace it," Deputy Prime Minister Bill English said.
Prime Minister John Key has led the push for reform, saying the existing ensign is a colonial relic that is too easily confused with Australia's flag.
He had previously nominated the winning design as his favourite, describing the silver fern as an instantly recognisable symbol of New Zealand.
The flag and an almost identical banner from the same designer, Kyle Lockwood, were clear winners in the five-way race, each receiving more than 550,000 first-choice votes of the 1.5 million ballots cast.
Lockwood's second-placed design simply changes the colour of one section of the flag's background from black to red. They both feature four stars of the Southern Cross as well as the fern.
"My father represented New Zealand in underwater hockey and he always wore the silver fern on black –- I always thought it would be on the flag one day," the designer said earlier this year.
"The Union Jack just doesn’t seem right for New Zealand these days."
- 'Kiwi as bro' -
However, polling indicates the current flag remains on track to beat any contender in next year's run-off referendum.
Formally adopted in 1902, it has a Union Jack in the upper-left corner with the Southern Cross on a dark blue background.
Once part of the British Empire, New Zealand is now independent, although Queen Elizabeth II remains head of state.
However, her power is seen as largely symbolic, and changing the flag is seen by some as helping cut lingering colonial ties.
Key argues a silver fern flag will boost New Zealand's global profile and will be "worth billions" to the nation of 4.5 million in the long term.
He has cited another former British colony, Canada, as an inspiration, saying the maple leaf adopted in 1965 is now a universally loved national symbol.
Opponents of change say New Zealanders have fought under the existing banner and also criticise the NZ$26 million ($17.5 million) cost of the referendum.
In a rare show of civil disobedience, veterans' group the Returned and Services' Association (RSA) encouraged Kiwis to spoil their ballots.
The normally conservative association argues that to change the flag disrespects previous generations of soldiers who have died fighting under the banner.
"When they have made the ultimate sacrifice for their country, our flag has been draped over their casket at military funerals," it says on its website.
The often heated debate has also had its lighter moments, particularly when the original 10,000-plus submissions for new flags were publically released.
One of the most popular designs with online users was a flag featured a kiwi bird shooting green lasers from its eyes.
Another had a sheep alongside a cone of ice cream, with designer Jesse Gibbs saying the juxtaposition of the two New Zealand favourites was "Kiwi as bro". - AFP