Farmer and New Zealand First MP, Mark Patterson, talked about the "incredibly dramatic" events last night at Parliament leading to the final decision.

It went "to the wire" as the country waited for Mr Peters to decide, the Lawrence farmer told the Otago Daily Times.

A crucial "clarification" resolved a "sticking point" just 15 minutes before Mr Peters' televised announcement. Farmers would be "very pleased" with what the party had forced Labour to concede, he said. He refused to confirm it had forced Labour to ditch its planned water tax.

Mr Patterson felt a sense of personal relief a decision had been made. The new Labour government would be good for the regions, he said.


"People in the South and the regions will be seriously impressed when they see the policy positions we have been able to secure on a number of fronts."

Labour's surprise election win signals real change for Dunedin and the country, a tearful Clare Curran, Dunedin South Labour MP, said last night.

Ms Curran, who, as an MP, has known her party only in opposition, said the new government would tackle big issues like housing and climate change.

But her first thought last night when New Zealand First leader Winston Peters finally revealed his choice after weeks of suspense was: "Dunedin's going to get its hospital."

"I don't feel personally triumphant. Why I cried is I felt really hopeful. It's a whole set of emotions that I haven't been allowed to feel.

"I think Dunedin sent a very strong signal to Wellington in the election that they wanted change, and they've got it, and now it's up to us."

Ms Curran said she was "so proud" of prime minister-elect Jacinda Ardern.

"All those people who need houses are going to get houses. It's not going to happen instantly (but) there will be really significant change," Ms Curran said.

Mr Peters ended three weeks of waiting last night by announcing he would enter a formal coalition with Labour. The Green Party would provide confidence and supply, a deal rubber-stamped by party delegates late last night.

Southern National MPs Jacqui Dean and Michael Woodhouse, both ministers, could not be contacted last night.

Dunedin North Labour MP David Clark was celebrating last night with people who were part of his campaign. Labour would make sure Dunedin was not left behind by central government, he said.

"Opposition is at times a frustrating place and it will be delightful to be part of constructive, positive change.

"The Dunedin result contributed strongly to the final outcome.

"Both electorates were up 15 points in the party vote and that is certainly not to be sniffed at," he said.

Dr Clark is widely expected to be the new health minister but was cagey when asked, saying there was a process to follow.

Prime minister-elect Jacinda Ardern said she was pleased to have concluded a successful negotiation with New Zealand First.

She had offered Mr Peters the role of deputy prime minister but he has not decided yet whether to accept.

"The negotiations have been courteous, constructive and robust. Throughout, we have focused on our shared values and the policies that can take New Zealand forward.

"We are both committed to forming a strong and durable government that can deal with the many challenges this country faces."

Announcing his decision, Mr Peters said too many New Zealanders had come to view capitalism as their foe rather than their friend. New Zealand First's deal with Labour would help change the status quo.

"That is why we believe that capitalism must regain its responsible, its human face. That perception has influenced our negotiations.

"We've had to make a choice, whether it was with either National or Labour, for a modified status quo, or for change."

A Labour-led government would be a historic moment for the Green Party, giving it ministerial control over the issuesdeemed most important, Greens leader James Shaw said late yesterday.

The Greens were last night holding a special general meeting with about 155 party delegates to ratify a confidence and supply agreement with the Labour Party, which would give Labour the numbers to lead a government with support from the Greens and New Zealand First.

"We are very excited about this opportunity."

Incumbent Prime Minister Bill English said he was proud to have left New Zealand in good shape, and felt privileged to have been prime minister. Mr English refused to say whether he would continue to lead the party, saying it was an issue for another day.

Main points

• New Zealand First to enter formal coalition with Labour.

• Green Party to offer confidence and supply.

• Final signed agreement to be released next week.

• New Zealand First to hold four Cabinet positions and one parliamentary under-secretary.

• Green Party will hold three ministerial roles outside Cabinet, and an under-secretary role.

• National leader Bill English said his party left New Zealand in good shape.

• New Zealand First said it made big gains for regions, farmers.

• Dunedin North MP David Clark expected to be new health minister.

• Elections to be held today in Labour caucus for Cabinet positions.