Corrections Minister Anne Tolley says a smoking ban in prisons has drastically reduced fire-related incidents and dangerous activities, while improving air quality for inmates.
Mrs Tolley said safety in prisons had improved since lighters and matches had been taken from inmates a year ago.
Officials said fire-related incidents fell from 76 in 2010/11 to 21 in 2011/12.
The smoking ban was introduced in July last year after a 12-month campaign to encourage inmates to quit.
"It has also removed the opportunity for prisoners to use lighters to melt plastic into dangerous weapons," Mrs Tolley said.
She said a study of Auckland Prison found air quality had improved significantly and fewer respiratory illnesses had been reported.
"Despite scaremongering before its introduction, the smoking ban has been a real success. Staff and prisoners will continue to be offered nicotine replacement therapy, as part of a wider plan to treat offenders with addictions."
The ministry announced an expansion of drug and alcohol counselling in this year's Budget as part of a goal to cut reoffending by 25 per cent by 2017.