Politicians and industry leaders announced the ambitious plan on Monday.
No country has managed to eradicate Mycoplasma bovis so far. Since it was first detected, the disease has spread to 37 farms, and computer modeling suggests it will eventually reach some 142 farms.
The bacteria, Mycoplasma bovis, can cause cows to develop ailments such as mastitis, pneumonia, and arthritis.
Although Mycoplasma bovis doesn't affect humans, according to DairyNZ, the spread of the disease impacts animal well-being and productivity. We have a real chance of eradication to protect our more than 20,000 dairy and beef farms, but only if we act now.
Officials have the legal authority to forcibly enter farms and kill animals even in cases where a farmer might resist, but they said they hope they don't have to use those powers.
The government has said that it will try to provide relief to the affected farmers in the form of compensation.
"This is a tough time, and the pain and anguish [affected farmers] are going to go through is really ugly", said Katie Milne, the organisation's president. "And we have to support them as neighbours, community members, farmers, friends".
The New Zealand government is expected to foot two-thirds of the hefty $560 million tab, while the cattle industry will pay the remainder. It has 6.6m dairy cows. The country is the world's largest exporter of milk and dairy products.
"For me personally, the only "silver lining" of this biosecurity response is that the whole farming sector has worked together so well", Katie says.
Mycoplasma Bovis has been found on about 40 farms so far but the government believes 192 properties will eventually be involved in the cull.
New Zealand has already culled 26,000 cattle in the 10 months since the disease was discovered. The cost of killing the cows is estimated at 886 million New Zealand dollars.
Jacinda Ardern says the government will work out the amount paid to each farmer on a farm-by-farm basis. "So if we have an opportunity to be the country that eradicates this disease, then we'll take it".