WELLINGTON, July 31 - The system, announced on Monday, could be in place by 2019 but Kaye says the factors that will be used to determine a school's risk index are still being considered.

She says the move away from the decile system is part of a culture shift at New Zealand.

"We want to remove this discriminatory label so schools are not labelled on their neighbourhoods, they are labelled for what they're doing in terms of teaching and learning," she said.

Rather than being made public, like the decile system, the details of how each school is ranked would be completely anonymous, with not even the Minister of Education aware of individual school results.

Schools will be told their funding amount and the number of students the funding is for, but no other information will be available to them, including which students they are receiving the funding for.

Prime Minister Bill English said he expected the new index to be positive for students as well as schools.

"One sad conversation I had ... was with a group of students from a decile one school who said to me they were tired of having to explain why they weren't hopeless," he said.

Factors used to determine the risk index include ethnicity, offending by a father, beneficiary dependency, and birthplace - New Zealand-born versus migrants.

"There's a lot of work to go on in terms of the technical detail and it will matter how those factors work together," Kaye said.

Kaye has promised no school will have their funding reduced as a result of the change.

Rather than using the decile system to judge schools, she said parents should look at Education Review Office reports and strategic plans.

Decile funding makes up three per cent of school funding.