They have until 24 March to send in a postal ballot choosing between the current flag and an alternative called Silver Fern, which won a previous vote.
The exercise has been controversial with many criticising the hefty price tag and shortlisted designs.
PM John Key says the current one looks too similar to Australia's and it is time to remove the Union Flag emblem.
The alternative design, Silver Fern (Black, White and Blue), was designed by architect Kyle Lockwood.
It won the first referendum in December, where New Zealanders could choose which of five designs they would want if the flag were to change.
About 1.5 million votes were cast in that referendum.
This time, they are deciding whether they want to abandon the current flag - which was adopted in 1902 and bears the British Union Flag - in favour of Silver Fern.
Mr Key has argued for a more distinctive look for New Zealand's flag, and has said it is also time to drop the Union Jack.
The prime minister, who backs the alternative design, said earlier this week it was New Zealand's last chance for change.
"If they don't vote for change now, they'll never get another chance until we become a republic," he said in a Radio New Zealand interview on Monday, adding that he did not think that would happen within his lifetime given the current popularity of the British royal family.
Silver Fern and the four other finalists were chosen by a committee from a large pool of entries submitted by the public, including designs featuring a kiwi shooting lasers out of its eyes and hand-drawn sheep.
But they were criticised by many as being uninspiring or safe. Many took issue as well with the NZ$27m ($18m; £12m) cost of the exercise, saying it was expensive and unnecessary.
-BBC
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