It's Labour ... and Prime Minister Jacinda Ardern.

New Zealand First has crowned Ardern the next prime minister with its decision to back a Labour-led government, which will also need the Green Party to govern.

Ardern will claim the top job after only two and a-half months as Labour leader - and follows her former mentor Helen Clark into the top job.

The decision will come as a shock to National, which holds two more seats than the Labour-Green bloc and ends its hope of leading New Zealand for a fourth term.

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The decision has just been announced at Parliament by New Zealand First leader Winston Peters.

Ardern will be New Zealand's third woman Prime Minister, after Jenny Shipley and Helen Clark.

She will also be its second youngest ever Prime Minister, after Edward Stafford who was also aged 37 when he took office 161 years ago.

At his press conference tonight Peters said there was an economic slowdown looming.

NZ First's choice came down to how best to mitigate the impact of that shock.

He said the biggest issue in negotiations has been poverty and the concentration of wealth in the hands of the few.

Peters dismissed claims that Ardern was not experienced enough to be prime minister.

He said Ardern showed extraordinary talent in the campaign "from a very hopeless position to the position they are in the government today".

NZ First came to its decision a mere 15 minutes before leaving for the Beehive, he said, and he did not call Ardern to give her the news ahead of time.

"This decision is owed first to the New Zealand people."

Peters was coy about what portfolios he had been offered, saying that was up to Ardern to announce - but he did not have the Minister of Finance job. He was, however, expecting changes to the Reserve Bank Act.

All NZ First's ministerial positions would be inside Cabinet, Peters said.

He also said the Greens had a confidence and supply agreement with Labour, as opposed to NZ First's coalition agreement.

The Greens were set to meet from 7pm to get consensus among their delegates on forming a Government with NZ First and Labour. The meeting is expected to take at least three hours and 75 per cent of delegates must agree.

After the September 23 election, Labour's 36.9 per cent and the Greens' 6.3 per cent gave them 54 seats between them, not enough for a majority without New Zealand First.

The three parties have 63 seats.

National polled 44.4 per cent and holds 56 seats, not enough for an outright majority.

The New Zealand First decision follows a week of parallel policy negotiations between New Zealand First and National and Labour.

The party caucus and board started meeting on Monday morning to deliberate.