The Government will consider a range of issues when it decides whether to extend New Zealand's deployment to Iraq or bring the troops home.
Defence Minister Ron Mark said New Zealand will be working closely with Australia and "understanding their position and what their government might be considering".
With Cabinet expected to make a decision next month, Mark said he's confident the Cabinet External Relations and Security Committee will have finalised consideration before the decision goes before Cabinet.
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"The decision we make will be this Government's decision based on its foreign policy and what it believes is best for New Zealand and its interests as a whole."
Mark said he'll be having discussions with Prime Minister Jacinda Ardern and Foreign Minister Winston Peters about what best approach the Government could take, considering the threat of terrorism.
"I think we have to be very mindful of our wider foreign policy considerations, our wider security obligations to strategic partners, and all of those factors will feature in the deliberation."
The Prime Minister said in September last year that New Zealand Defence Force personnel would remain in Iraq until June 2019 and beyond that the Government would be "looking at the future of our contribution".
She also said keeping the troops in Iraq beyond 2019 was a "possibility", telling The AM Show: "I do want us to have the opportunity to look at the environment."
The joint US-led mission with Australia, known as Operation Manawa, was announced in February 2015, with the primary purpose of training Iraqi soldiers and Federal Police personnel, in their fight against Islamic State (IS).
The mission was extended through to November 2018 by the previous National-led government beyond the initial finish date of May 2017. In Opposition, Labour promised to pull the troops out, accusing National of mission-creep.
There are now about 121 defence force personnel mostly based at Iraq's Taji Camp and intelligence officers based out of Qatar. There are also 11 military personnel training army officers in Afghanistan whose presence will be reassessed.
Ardern said last year the Government was under no pressure from other countries to keep New Zealand forces in Iraq, and that the decision to keep troops there was based on "obligations" and because "ISIS remains a threat".
Mark said New Zealand is focused on "ensuring we have as good intelligence and information as we possibly can have and that we work collaboratively and collectively to share information and coordinating our efforts" against IS.
The Greens have called for an immediate withdrawal of the troops saying the deployment is a waste of money. Defence spokesperson Golriz Ghahraman believes the money should be redirected towards protecting the Pacific.
National's defence spokesperson Mark Mitchell has called the Iraq mission "hugely successful" in that it's helped the Middle Eastern nation reach stabilisation after years of war.
He's also pointed to the US having urged its coalition partners to maintain a presence in Iraq.