A deal to sell the Crafar dairy farms to Chinese company Shanghai Pengxin will also see the genes of quality Kiwi sheep exported to China.

The sale, which has Overseas Investment Office approval, faces a final legal hurdle on Monday when rival bidders, led by New Zealand businessman Sir Michael Fay, appeal the deal for a second time in the High Court at Wellington.

State-owned Landcorp has signed a deal with Shanghai Pengxin to run the farms, and chief executive Chris Kelly told Fairfax the sale would allow the company to enter the Chinese market.

"We're going to look at exporting genetic material. Shanghai Pengxin has about 100,000 sheep in China, and is looking to advance flock progress," he said.

"It recognises that New Zealand has some superior genetics, and is keen to talk to us about spreading those genes through its flock."

Mr Kelly said improving China's sheep genetics would assist that country access a secure supply of quality meat, which New Zealand offers.

He said Landcorp will "make damn sure" the revenue flows back to New Zealand.

Green Party co-leader Russel Norman said it was a risky move to give away years of selective breeding.