"It's going to help the most disadvantaged young people in our communities who already have extra challenges," Shea said.
"When I look back on it, I think it's quite incredible that students had to pay for what was a national qualification."
Education Minister Chris Hipkins said those with unpaid fees would now have their academic records backdated.
"It also means that employers will now be able to verify that their employee or potential employee has earned their NCEA qualification," he said.
"These students have worked hard to earn these credits or qualifications, and it's not right that they don't get to use it because their families struggle to pay the fees."
The Child Poverty Network, which has for years called for the fees to be scrapped, said the system had been "grossly unfair".
"NCEA fees are such a cost barrier, they add to poverty stigmas when families can't afford them, and we are really pleased the Government is working toward taking those barriers down," spokeswoman Jeni Cartwright said.
The debt write-off will see 149,618 former pupils get additional credits. For 60,595 it will mean at least one new qualification is awarded.
It will see 24,545 Level 1 qualifications handed out, 26,832 at Level 2 and 32,743 at Level 3.