The Chinese-made locomotives were introduced from 2010, with a contract specification that clearly stated no asbestos.
Questions were raised last year after asbestos was discovered in 10 Australian locomotives manufactured by the same company, but assurances were given that New Zealand's fleet were asbestos-free.
"We are clearly very disappointed," said Mr Reidy. The makers "have undertaken to do whatever is necessary to rectify the situation as quickly as possible."
Asbestos Solutions chief Rick Peebles said the material, to muffle noise, was bonded in a resin in the cabs and in "very good condition".
What is asbestos?
• It's composed of six minerals, made up of many small fibres.
• It was widely used as a building material until its health effects became known.
• Breathing in fibres from asbestos dust can cause breathing difficulties or even lung cancer.