Coastal cities were hit by a tsunami not long after the earthquake.
"New Zealand's emergency response includes a $1.5m contribution to the International Federation of Red Cross and Red Crescent Societies emergency appeal," said Peters.
Peters said the aid would support the Indonesia Red Cross to deliver emergency assistance such as shelter, basic needs, and water, sanitation and hygiene kits
A further $100,000 will be made available to allow the New Zealand Embassy in Jakarta to respond to other immediate needs, Peters said.
"New Zealand remains in close contact with the Indonesian Government and stands ready to offer further help in what is a large and complex recovery effort."
Peters, who is currently in Thailand, is scheduled to be in Jakarta on Thursday, and will convey condolences in person on behalf of the Government.
The coastal city of Palu was one of the worst affected areas being hit by waves as high as 6m.
The surge of water caused widespread destruction to the city.
Indonesia's National Disaster and Mitigation Agency has said that most of the victims in Palu were killed as a result of the tsunami.