One-third of New Zealand's offshore waters is going to be declared off-limits to bottom-trawlers.
Orange roughy are a target species for the trawlers
The announcement was made in Wellington at the end of a fisheries conference attended by delegates from 20 nations.
If the decision is followed through, it would result in the world's largest total closure to bottom-trawl fishing within an Exclusive Economic Zone, EEZ.
Conservation groups say bottom-trawling is the most destructive type of fishing undertaken in the world's oceans today.
Ships trail heavy nets across the sea bed, catching fish but destroying coral and other organisms.
Marine scientists say some of the species affected are extremely slow growing and would take hundreds or even thousands of years to recover from the damage.
The fisheries conference was hosted by the New Zealand, Australian and Chilean governments.
It was convened to discuss how to manage the international waters of the South Pacific, where there is currently little control over fishing methods or management of non-highly migratory fish stocks, such as orange roughy, squid and mackerel.
The unprecedented deal with major fishing companies will mean that nearly 1.2 million sq km of ocean floor around New Zealand will become "Benthic Protection Areas" (BPAs) where bottom-trawling and other types of invasive fishing operations will be banned.
Making the announcement, New Zealand Fisheries Minister Jim Anderton said the agreement was "an unprecedented win-win for conservationists and fishermen".
He said the areas involved lay across a range of depths, and covered a range of habitats that broadly represented New Zealand's offshore waters.
The news seemed to catch environmental organisations by surprise.
Greenpeace was maintaining a high-profile presence at the Wellington conference, organising street theatre events to highlight images obtained from the Ministry of Fisheries under New Zealand's Official Information Act.
The photos show a wide diversity of deep-sea life being dragged up from the deep-sea floor, including bizarre crabs, strange octopi, ancient gorgonian corals and endangered black coral.
These PR activities were producing positive media coverage for Greenpeace's demand for an immediate temporary ban on bottom-trawling in southern oceans, while talks continued on the establishment of a South Pacific Regional Fisheries Management Organisation (RFMO).
Greenpeace's response to the BPAs announcement was a press release contending that "the devil is in the detail".
Greenpeace oceans campaigner Carmen Gravatt said the areas involved did not seem to represent all the vulnerable areas at risk from bottom-trawling.
"We know, for example, that some of these areas are too deep to bottom-trawl and others have already been fished out," she said.
Other environmental organisations were also dismayed by the news. Lorraine Hitch from WWF said that it was regrettable that, "governments appear to be going down the track of a sectoral fisheries management approach which has so spectacularly failed elsewhere, rather than adopting an ecosystem-based management approach."
Cath Wallace of New Zealand's Environment and Conservation Organisations (ECO) said: "Just as much deep-sea life is being wiped out today as last week.
"Environment groups and thousands of people from around the world called on states to ban bottom-trawling.
Seafloor before (top) and after (bottom) the trawlers have passed through
"Instead they have chosen to sit on their hands and sacrifice deep-sea life while talks continue for many years."
However, the mainstream media generally put a positive spin on the news, leading industry observers to conclude that the environmental movement was caught off-balance, allowing the fishing companies to seize the initiative in the bottom-trawling debate - at least temporarily.
Asked about Greenpeace's demand for an international ban on bottom-trawling, Fisheries Minister Jim Anderton said New Zealand would support a global moratorium, but only if it had sufficient international backing to make it a practical option.
"It would need the unanimous support of the United Nations General Assembly - and that's a long way off."
The fishing companies involved, such as Sanford and Amaltal, strongly dispute Greenpeace's allegations that they are doing huge damage to the ocean floor and its lifeforms.
Amaltal company director Andrew Talley has labelled Greenpeace's allegations as "unsubstantiated claptrap".
Stan Crothers, head of New Zealand's conference delegation, takes a more measured view.
"We had hoped to initiate interim measures to address... the adverse impact of bottom-trawling, but progress in this area wasn't as rapid as we would have liked," he said.
"However, there is at least now a process in place... we have to remember that although New Zealand, Australia and Chile have been discussing this for over a year, most of the delegates around the table this week were discussing it in detail for the first time.
"In the meantime I'm extremely heartened by the progress this week and look forward to more when we reconvene in Australia in November."
It is hoped the deal to establish the newly protected areas of ocean floor in the South Pacific will be ratified by October 2006.