P&O says it was increasingly apparent that the improvement of cruise ship infrastructure in Australia and across the Pacific was not moving as fast as the company had hoped to support a ship the size of the new build we it intended for the fleet in 2019.
"We also look forward to greater certainty around costs, berth availability and infrastructure." said P&O Cruises Australia president Sture Myrmell.
O'Sullivan said the country had ''huge'' opportunities to continue to grow cruise tourism and was missing out because of delays in providing infrastructure.
''The decision by P&O is a wakeup call that we must get our act together to improve cruise infrastructure if we are to continue to enjoy the benefits that cruise tourism brings."
The largest cruise ship to visit New Zealand, the Royal Caribbean Cruise Lines' 348m-long Ovation of the Seas, arrives in Auckland on December 27, but is too long to berth in Auckland. It will have to anchor off Queens Wharf with passengers ferried on tenders to the Viaduct area.
Royal Caribbean has said it is disappointed the ship wouldn't be able to tie up alongside Queens Wharf this summer and the next as plans for a ''mooring dolphin'' have been delayed and it was uncertain when it could be built.
O'Sullivan said Ovation would at Dunedin, but bypass Canterbury and go straight to Wellington because there were no berths in Lyttelton.
"Auckland must provide a berth for larger cruise ships urgently, and Lyttelton should proceed with bringing cruise ships back, to ensure Canterbury does not miss out on this large tourism market."
The cruise industry is worth close to half a billion dollars a year in spending.