Cabinet has extended New Zealand's non-combat training mission to Iraq until June next year but reduced the number of personnel to be deployed from 143 to 121 from November.
It has also extended the deployment of eight trainers to Afghanistan to September 2019 but Prime Minister Jacinda Ardern has strongly hinted that a complete withdrawal will be an option for both Iraq and Afghanistan.
The Government will reassess the Iraqi deployment early next year and conduct "a strategic reassessment" of the contribution to Afghanistan.
"The New Zealand Defence Force has made a significant contribution to peace and stability in Afghanistan since 2001," Ardern said at her post cabinet press conference.
"After nearly 20 years, this Government thinks it is time to assess the question of New Zealand's longer-term presence there, including alternative military and civilian contributions."
"In the cases of Iraq and Afghanistan the Government will be using the coming year to consider all of our options and that does include withdrawal."
She said Cabinet had given the deployments a huge amount of consideration and she had personally telephone Australian Prime Minister Scott Morrison to convey them.
New Zealand's training mission in Iraq, which has trained over 37,000 Iraqi security forces including 4300 federal police, is run as a joint Anzac mission.
Ardern also said the Cabinet had also renewed New Zealand's contribution to three peace-keeping missions: the United Nations Mission in South Sudan to July 2020; the UN Truce Supervision Organisation in the Golan Heights and Lebanon to September 2020; and the Multinational Force and Observers mission in the Sinai Peninsular, Egypt, to September 2020.
New Zealand has three NZDF personnel in South Sudan, where the mission is led by former Labour leader David Shearer; it has up to eight unarmed personnel in UN Truce Supervision Organisation; and up to 28 personnel in the Multinational force and Observers mission, which current Defence Minister Ron Mark once served in.
All three parties in the Government, Labour, New Zealand First, and the Green, opposed New Zealand establishing a joint training mission with Australia in 2015 at Camp Taji, just north of Baghdad.
The Greens still oppose the mission, but they are not part of the Cabinet.
Foreign Minister and New Zealand First leader Winston Peters said New Zealand remained firmly committed to the international effort to fight ISIS.
The Iraqi forces had made some significant gains, Peters said. "However it is clear that ISIS remains a threat, and further support is required to help the Iraqi Security Forces ensure ISIS cannot reassert itself."