Rotorua-based NZ First list MP Fletcher Tabuteau is feeling a "sense of relief and excitement" that the announcement by his leader has been made.

"I was part of the negotiation team from the very start and that process has been incredibly complex and detailed.

"It was a very long, intense discussion with both sides where policy really was paramount."

Mr Tabuteau said this was an "important acknowledgement" of how the MMP system can work.

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Reiterating the words of his party leader Winston Peters, Mr Tabuteau said the decision of who went where would be down to the new Prime Minister.

"To be honest, I have no idea at this stage where I could be placed.

"My advice to Rotorua is to be excited, because this is going to be great."

The song Celebration was playing at Ponsonby Rd Bar in Rotorua tonight as Waiariki MP Tamati Coffey and his supporters reacted to the news Mr Peters had chosen to work with the Labour Party.

"Just like on election night all I knew is it would go one way or the other and I am stoked that it has gone our way," Mr Coffey said.

"This means that we get to implement the changes we campaigned on."

Mr Coffey said he would now be able to give Waiariki a voice in government.

"That's where the changes are made. I look forward to bringing some significant change to the people of Rotorua, the Bay of Plenty and New Zealand as a whole."

But it's not such good news for Rotorua MP Todd McClay, who will now find himself in the opposition and will lose his Minister of Trade and State Owned Enterprises position.

Mr McClay could not be contacted for comment.