The Education Review Office says high schools should be teaching about pornography and sexual violence so teenagers learn what's healthy and what's not.
The agency, in its first review of sexuality education in schools since 2007, says schools have not kept pace with an explosion of access to pornography and other sexual content on smartphones and social media.
"To meet the needs of young people in our current context, sexuality education needs to be more comprehensive and the variability across schools needs to be reduced," it says.
"This evaluation found some schools were failing to meet minimum standards of effectiveness, and many more were only just meeting these standards.
"Given the complexity of the issues involved, and the impact sexuality issues have on young people's wellbeing, this performance is not good enough."
The report says upcoming findings from The Light Project, founded by Auckland sexual health workers Nikki Denholm and Jo Robertson, show that many NZ teens are learning about sex through pornography.
But their research shows that most porn depicts violence against women (94 per cent), physical aggression (88 per cent), spanking (75 per cent) and verbal abuse (49 per cent).
"Pornography rarely depict meaningful consent, and often includes coercion and/or violence, particularly towards girls and women," ERO says.
"It is therefore of some concern that ERO found pornography was one of the least well covered aspects of sexuality education. ERO therefore recommends further investigation into the impact of pornography on young people."
Sexuality education is one of seven "key learning areas" in the health and physical education curriculum, which is compulsory for every year from Years 1 to 10.
Primary schools start by learning about healthy relationships between friends, and by high-school level students should be learning about sexual relationships.
ERO says the topic should include, across all years: friendship skills; communication skills; building self-esteem; relationships; gender stereotypes; gender and sexuality diversity; social norms and pressures; anatomy, physiology and pubertal change; conception and contraception; and consent and coercion.
In high schools it should also include: sexually transmitted infections; sexting, pornography; alcohol and drugs as they relate to sex; and sexual violence.
However, ERO found that only a third of primary schools are teaching about gender and sexuality diversity and only half are teaching about gender stereotypes.
Fewer than half of secondary schools were covering porn and sexual violence.
The agency recommends that high-school students should get 12 to 15 hours of sexuality education in both Years 9 and 10, but found that "only a few schools met this benchmark".
It says school boards should also provide "explicit and proactive" support for sexually and gender-diverse students, including gay and trans students, rather than waiting for a problem to arise.
Schools should "proactively consider how to promote an inclusive and welcoming environment for sex- and gender- and sexuality-diverse students, including reviewing uniform and bathroom options".
"This could be as simple as providing the same range of uniform options as before, but dropping the designation of certain items as being for boys or girls," ERO says.
"Some schools provided gender-neutral bathrooms for students, but in many, leaders and trustees saw this as being prohibitively expensive or not possible with current property arrangements."
It says boards should have policies that "affirm, diversity, e.g. through gender-neutral uniforms policy, gender neutral bathrooms, acceptance of same-sex partners at balls."
All school boards of trustees are required by law to consult their community about their sexuality education at least every two years, and must allow parents to pull their children out of the topic if they wish to.
However ERO found that only 25 per cent of school boards had "good" consultation with their communities on the issue, 46 per cent were just "compliant", and 29 per cent were "unsatisfactory".
"In most cases, this was because the boards did not meet their legal obligation to consult every two years, either because they were unaware of the requirement to do so, or because of the low priority afforded to health in the school's curriculum."