Wellington - Team New Zealand on Friday launched the first of the cutting-edge yachts it will use to defend the America's Cup in Auckland in 2021.

Named "Ti Aihe", Maori for dolphin, the yacht features an innovative foil arm, which lifts the hull above the surface of the water to reduce drag and increase racing speed.

The AC75 design for Auckland 2021 features a 23-metre (75-foot) monohull, rather than the 15-metre foiling catamarans used during the last regatta in Bermuda in 2017.

"The AC75 is a completely new concept and has presented plenty of challenges... we haven't been conservative in any aspect of our design," Team New Zealand (TNZ) design chief Dan Bernasconi said.

TNZ chief executive Grant Dalton said computer simulations predicted the yacht would reach high speeds but proof would come as it was tested in Auckland harbour over the next few months.

"It's a brand new design and it's only a matter of time until we find out if it's a good one," he said.

"It always depends on the weather and basically the wind forecast, but it's going to do 50 knots (93kmh/58mph)."

The yacht will be used to test design tweaks, which will be incorporated into a second vessel that will be used to race in 2021.

TNZ earned hosting rights after defeating Team USA 7-1 in Bermuda in 2017.

The regatta involves challengers competing for the Prada Cup, with the winner then racing TNZ for the America's Cup, the oldest trophy in international sport.

The four challengers are Luna Rossa (ITA), American Magic (USA), INEOS Team UK (GBR) and Stars & Stripes Team USA (USA).