Jacinda Ardern opened her first press conference as NZ's Prime Minister-elect by acknowledging her predecessor in the role, National leader Bill English.
"I want to thank Bill English for the role he has played in this campaign but also as prime minister and as serving in the past as NZ's finance minister," she said.
"Mr English has already called me this evening and acknowledged that negotiations for the National Party have now concluded."
The Greens are expected to back Labour on confidence and supply, giving the combined parties, along with NZ First, 63 seats, two more than the 61 majority they need.
Stepping into Government brings the left out of the cold of opposition for the first time in nine years.
Labour will hold a caucus meeting on Friday morning to select a cabinet.
Four places will go to NZ First MPs while they will also have a parliamentary undersecretary.
Peters has been offered the role of deputy prime minister, pushing aside Labour's deputy Kelvin Davis, but Ardern said he was still considering whether to take up that offer.
The Green Party is still working to finalise its involvement in the government arrangement, Ardern said.
English is expected to hold a press conference at 8.30pm and Greens' co- leader James Shaw after that.
While Ardern was not given the good news in advance Mr English was also not given a heads up of his defeat.
His wife Mary and sons Connor and Xavier - two of six siblings - were seen arriving ahead of the announcement to offer support.
Peters said the decision was owed first to the New Zealand people.
"With respect the people of this country are the ones who deserve to know first," he said, through he conceded "that would be the nice thing to do".
NZ First made the decision based on how to best mitigate, not worsen, what New Zealand is expected to face in the coming years, Peters said.
He has anticipated an economic correction or slowdown and believes the major policies secured in the negotiations are the best to advance New Zealand's economic and social condition.
"Big or small, all of these policies are important," he said.
"It is not my privilege or responsibility to summarise and announce them today, that will befall someone else."
Ardern earlier vowed to lead a country we can all be proud of.
"This is an exciting day. We aspire to be a government for all New Zealanders and one that will seize the opportunity to build a fairer, better New Zealand," she said.
Ardern noted that the deal still required the sign-off by the Greens, whose delegates meet tonight. It requires 75 per cent of delegates' approval to approve.
"The Green Party is now undertaking its internal approval process before we confirm final arrangements to form a Labour-led progressive Government," Ardern said. This too has been an excellent process, which I thank James Shaw and his team for."
Ardern said negotiations with NZ First had been "courteous, constructive and robust". Throughout, we have focused on our shared values and the policies that can take New Zealand forward.
Ardern said negotiations with NZ First had been "courteous, constructive and robust". "Throughout, we have focused on our shared values and the policies that can take New Zealand forward."
- NZN, with NZ Herald