Prime Minister John Key will hold formal talks with Australian Prime Minister Kevin Rudd in Sydney at the start of March.

Mr Key will leave New Zealand on Sunday afternoon, 1 March, and return on Monday night, 2 March.

"Australia and New Zealand are near neighbours and the closest of friends. Our relationship with Australia is a vitally important one," says Mr Key.

"I have met and had talks with Mr Rudd twice since becoming Prime Minister, and I'm looking forward to this opportunity.

"I will be extending New Zealand's condolences to Mr Rudd on the terrible bushfire tragedy in Victoria, an event that has deeply moved New Zealanders.

"Mr Rudd and I will discuss bilateral, regional and international issues, including the global economic crisis. We will also discuss our engagement in the trans-Tasman Single Economic Market."

In addition to meeting Mr Rudd, Mr Key will meet with business leaders and senior members of the Australian Cabinet.