Subscribers will be able to stream content over computer, mobile phone and iPad, rather than having to maintain a library of downloaded songs.
Lake said Kiwi music fans had been held back for too long from accessing legal online music services.
"Spotify is the first to offer a massive music collection that can adapt to a listeners needs and stream to devices.
"Eventually we will all be paying a subscription for music and we'll have less music physically stored on devices and home computers."
Spotify offers three services, ranging from free to paid subscriptions.
The free service is subject to advertising, Spotify Unlimited costs $7.49 a month and is ad-free, and Spotify Premium is $12.99 a month and gives access to music online or offline on a range of devices.
"Spotify is a game changer," said Kate Vale, Spotify's Managing Director Australia and New Zealand.
"This is a revolutionary new music service that's free, simple, and provides lightning-fast access to one of the world's biggest music libraries. We hope New Zealand music fans will love Spotify as much as they do across Europe and the US."
Spotify is now available in 15 countries around the world.