Vice-Chancellor, Professor Stuart McCutcheon said the university community was pleased with the result, adding: "We do think that the high rankings internationally are something the country as a whole can be proud of.
"Our efforts will continue to be focused on achieving excellence in all that we do, including a focus on the University's strengths in research and the very high quality education that we offer to New Zealanders."
It was followed by the University of Otago, sitting in the 201-250 division.
The University of Canterbury improved 50 places to rank at 351-400, equal with Victoria University of Wellington.
The University of Waikato retained the same rank (401-500), and was joined by Massey which improved 100 places, and Lincoln University, which joined the top Times Higher Education rankings for the first time.
"These are fantastic results for a small, specialised university like Lincoln," chairman of the University Research Committee Professor David Simmons said.
"We are starting out on a programme to refresh Lincoln and these rankings show us that we are starting from a firm base. They also show our current and future students that Lincoln is well regarded and they've made a good choice to come here."
The ranking also highlighted the number of international students "who see Lincoln as having a reputation and international profile which will be beneficial to them", he said.
Auckland University of Technology also improved 100 places to 501-600.
"These are extraordinary results considering just how competitive global university education has become," Chris Whelan, executive director of Universities New Zealand, said.
"They mirror the QS rankings released earlier this month, where six of our universities improved their rankings and all were ranked within the world's top 3 per cent of universities in the world."
All eight universities have worked incredibly hard to lift or retain their rankings in this highly competitive global sector, Whelan said.
"New Zealand's university sector has worked relentlessly to enhance teaching and research activities, to increase their international relationships and profile, and to provide their graduates with the skills they need to succeed in the workforce and in life."
Phil Baty, the editor of the Times Higher Education World University Rankings, said it was "great news" that all eight New Zealand universities made it into this year's top 600.
"All of New Zealand's representatives have either moved up or achieved the same rank last year - a great achievement," he said.
"The rankings data show that the country's universities are highly internationalised, drawing in top international talent and collaborating with scholars from across the world."
The Government has increased funding to universities by $90 million over the past two years, and Whelan said this would help their position in future rankings. In particular, new research funding will be central to this, as rankings are heavily weighted towards measuring a university's research quality and impact.
"The increase in funding in the past two years has not been enough to relieve the significant financial pressure facing the university sector, but it has helped the sector address some of the most pressing needs and will assist universities in lifting the quality of both teaching and research necessary to maintain or grow rankings in future."
The rise in rankings has been accompanied by a lift in the number of international students coming to study in New Zealand, Whelan said.
"Over the past two years, numbers of students studying in New Zealand universities have increased by 4 per cent - bringing another 1071 students to this country."
However, the rankings also came with a warning for New Zealand.
"New Zealand will have to watch out for Asia's continuing ascent," Baty said.
"New Zealand is a key research partner for many Asian universities so the nation can capitalise on the region's success, although it may find it harder to attract top Asian students and academics.
"New Zealand's success at the top of the ranking cannot be guaranteed in the long-term while more of Asia's leading universities soar to join the world elite."
Addressing this, Whelan said Asian governments were "substantially increasing" their investment in universities, because they recognised a well-educated labour force was needed for long-term economic development. He called on the Government to further invest in New Zealand's tertiary sector.
"Universities make a major economic contribution to this country and are key players in many initiatives to lift economic and social outcomes," he said.
"We call on this Government to recognise that investing in its universities is an investment in the economic and social prosperity of New Zealand and all New Zealanders."
The Times Higher Education World University Rankings develops international university performance tables by judging the best global universities across their core missions - teaching, research, knowledge transfer and international outlook.
"This year's expanded list is testament to just how competitive global higher education has become," Baty said.
"For starters, our top 980 universities come from 79 different countries.
"There is also a new number one for the first time in six years; the US loses the top spot for the first time in the 12-year history of the rankings as the UK's University of Oxford becomes the world's top university."
TIMES HIGHER EDUCATION WORLD UNIVERSITY RANKINGS 2016-17 -NEW ZEALAND RANKING
RANK 2016-17
TIMES HIGHER EDUCATION WORLD UNIVERSITY RANKINGS 2016-17
TOP 10 RANKING
• To view the full results and analysis go to www.thewur.com
