Jacinda Ardern will become the country's third female prime minister, after New Zealand First leader Winston Peters threw his support behind Labour to form a coalition government and end nearly a decade of National rule.It comes nearly a month after an inconclusive election result left both National and Labour courting his nationalist party to form a governing coalition.
"We had a choice to make … for a modified status quo or for change," Mr Peters told reporters in Wellington, ending nearly a month of political uncertainty.
"That's why in the end, we chose a coalition government of New Zealand First with the New Zealand Labour Party."
New Zealand First holds the balance of power with nine seats, a Labour-Green bloc controls 54 seats, and the National Party 56 seats.
The announcement means Ms Ardern, 37 and the youngest-ever leader of New Zealand's Labour Party, will oust incumbent Bill English as prime minister.
During the campaign she said she wanted to build thousands of affordable homes to combat runaway house prices, spend more money on health care and education, and clean up polluted waterways.
Mr Peters said his party's negotiations were heavily influenced by changing the way capitalism was perceived in the country.
"Far too many New Zealanders have come to view today's capitalism not as their friend but as their foe, and they are not all wrong," he said.
Earlier in the day Mr Peters told reporters that making a decision had been "seriously difficult".
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