The Dumfriesshire, Clydesdale and Tweeddale MP was one of ten new appointments made by the Prime Minister tasked with working in “dynamic markets” and breaking “down barriers to trade”.
The Tory MP and former Scotland Secretary claimed he was “delighted” with the role.
He said: “There are huge opportunities to increase trade between the UK and New Zealand from a prospective free trade agreement.
“I will be looking to build on the strong historic links between New Zealand and the UK, but also to grasp new opportunities.
“As Secretary of State for Scotland, I promoted Scottish and UK products and services, from whisky to tech and found a welcoming and receptive audience.
“Together, I am sure we can turn that positive attitude into real business and subsequently jobs for both countries.”
The Government already has Trade Envoys in more than 60 countries, drawn from a cross-section of parties, and they aim to build on the UK’s strong relations with key trading countries and work with the Department for International Trade’s global network to break down barriers to trade.
Mr Mundell served as Secretary of State for Scotland for four years but was sacked by Boris Johnson in 2019.
He was replaced by the Dumfries and Galloway MP Alister Jack.
Speaking at the time, Mr Mundell said: "Mr Johnson made it clear he wanted a cabinet in his own mould - I'm clearly not in that mould.
"I've never been a cheerleader for him, which is well documented.
"I was prepared to work with him because my overriding priority is keeping Scotland in the United Kingdom and making sure that we deliver a Brexit that's best for Scotland."
Other appointments included the ex-England cricketer Ian Botham, with the House of Lords crossbencher now becoming a trade envoy to Australia.
Lord Botham, who played 102 Test matches for England between 1977 and 1992, is a huge supporter of Brexit and was knighted in 2007 for his services to charity and cricket.
International Trade Secretary, Liz Truss, said: “Our Trade Envoys play a key role in delivering our ambitious global trade agenda, and I am delighted the Prime Minister has appointed ten Trade Envoys who will boost opportunities for British businesses in some of the world’s fastest growing markets.
“By boosting exports, promoting inward investment and creating high-value, high-paying jobs, our Trade Envoys will help us build back better from Covid-19, ensuring every part of the UK benefits from our trade strategy.”
Praising Lord Botham on Twitter, she added: “Delighted we have appointed cricket legend Ian Botham as our new trade envoy to Australia.
“Ian will bat for business down under and help them seize the opportunities created by our historic trade deal. He’ll do a brilliant job.”
Former Labour MP and Brexiteer Baroness Hoey has been appointed to Ghana, while Stephen Timms MP has been assigned to Switzerland and Lichtenstein, and former DUP leader Sir Jeffrey Donaldson MP to Cameroon.
Mark Eastwood MP will handle Pakistan, Marco Longhi MP Brazil and Conor Burns MP will be the envoy to Canada .
Lord Walney has been assigned to Tanzania, while Felicity Buchan MP has been appointed to Iceland and Norway.