The world financial crisis will be a challenging backdrop to Helen Clark's new role as head of the United Nations Development Programme (UNDP), New Zealand's former UN ambassador Terence O'Brien has said.

UN Secretary-General Ban Ki-moon confirmed from New York this morning that New Zealand's former prime minister was his preferred candidate for the role.

Helen Clark said she was greatly honoured to be nominated for the role but would not comment further until it was formalised. The General Assembly still needs to meet to discuss and confirm the nomination.

The role would put Helen Clark in charge of a multi-million dollar budget but Mr O'Brien said her job was likely to be made harder by the impact of the world financial crisis on aid contributions.

"Foreign aid is coming under tremendous pressure because the aid donor community, the countries that give the aid, are absolutely consumed now by the financial crisis and the need to get the basics of capitalism working again," he said.

Mr O'Brien said the Millennium Development Goals would also prove a challenge for Helen Clark's new role. The goals include eradicating poverty and have a target date of 2015.

"At the moment it's sad to say most of the Millennium Development Goals seem quite a long way off from being achieved by the 2015 goal, particularly poverty eradication and particularly in Africa," he said.

He said the goals were a contract between donor states and recipients states who had an obligation to tackle corruption and ensure the aid is delivered to those it is intended for.

"On the donor side, the levels of aid have not been increased in order to support improvements in Africa and elsewhere," Mr O'Brien said.

A statement from the UN this morning said Helen Clark was selected because of her outstanding qualifications and numerous accomplishments in her long career.

She had the needed leadership and international recognition that would allow her as the new administrator to build on the role, it said.

Mr O'Brien said the decision to appoint her was ground-breaking because the UNDP had never been led by a politician, let alone a former prime minister.

He said she would be one of only a few Kiwis to be in a senior role at an international agency but that New Zealanders were "highly regarded" in diplomatic circles because of their impartiality.

New Zealand took the "middle road" because many of its Pacific neighbours were developing countries, he said.

Prime Minister John Key said Helen Clark was a highly regarded New Zealander who had international credibility.

"The Government fully endorsed her application for this position, which will make her the number three in the UN.

"This will be the highest diplomatic position held by a New Zealander, and I think we can all take pride in her significant achievement," he said.

"Her leadership experience will help ensure she can mobilise resources and represent the UNDP effectively."

New Zealand works with the UNDP on skills development and government capacity-building programmes in the Pacific, Asia and Latin America, and is also an active member of UNDP's executive board.

Labour Leader Phil Goff also said Helen Clark would do a great job.

"She has the leadership and managerial skills, the integrity and competency and international networks to meet the considerable demands of the job," Mr Goff said.

"Helen's achievements as a Member of Parliament, Minister of the Crown, Opposition Leader and Prime Minister are considerable, but her new role will take her on to a different stage."

A spokesman from Mr Goff's office said it was too early to start discussing who might be put forward as a replacement for Helen Clark when her Mt Albert seat became vacant.

The UNDP was established in 1965 and among its aims are reducing poverty, halting the spread of HIV/Aids, improving environmental protection and raising the standards of governance internationally.

- With NZPA