National Party leader Bill English, gracious in defeat, has congratulated Jacinda Ardern as she prepares to become the next Prime Minister.
NZ First on Thursday chose Labour over National as its coalition partner, ending National's nine-year reign.
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"We wish the new Government well in taking the opportunity, the generational opportunity, to build on economic strength and also deal with long-standing issues that New Zealanders want to see dealt with," Mr English said.
"I know we have left New Zealand in great shape by any international standard."
National, although it lost out, has more seats in Parliament than any other party.
"We will be by far the strongest opposition party this Parliament has seen because nearly one in two New Zealanders supported us," Mr English told reporters.
"And for a party going into opposition, we're in the best shape you've ever seen - there's talent, energy, a group of people who were geared up to be the government."
Mr English, flanked by his wife Mary and senior colleagues, said his own future was something that would be discussed in the coming weeks.
National always has a leadership contest after an election, and Mr English has to decide whether to put himself forward.
Mary English said she was "proud of my husband, proud of my family, and proud of my party - the National Party".