Lawmakers have voted to pass the COVID-19 Public Health Response Bill which sets the legal framework for alert level 2.
It was passed by the Government on Wednesday afternoon after it was introduced to Parliament on Tuesday.
The Government is no longer declaring a state of emergency as the nation shifts out of alert level 3, and Attorney-General David Parker says the time has come for a "bespoke piece of legislation" to guide the new rules.
It will become law in time for the move to level 2 on Wednesday night.
Parker, who is the member in charge of the Act, says it is specifically designed to stop the spread of COVID-19.
"The COVID-19 Public Health Response Act will ensure controls on gatherings of people and physical distancing are still enforceable while narrowing the Police powers from those that applied under level 3 and level 4," he says.
Until Wednesday, the enforceability of restrictions under alert levels 3 and 4 relied on the Epidemic Preparedness Act, the Health Act and the Civil Defence Emergency Management Act, which all gave the Government powers to intrude on civil liberties.
Whereas the Health Act gives power to the Director-General of Health Dr Ashley Bloomfield, the new legislation transfers some power to Health Minister Dr David Clark, who will be able to make judgements based on more than just health.
Parker says since there are fewer restrictions under level 2, the Government is now in a position to restore civil liberties and economic freedoms that were previously curbed under lockdown.
"However, those remaining restrictions still need to be enforceable. Despite claims by some critics, the powers of the Police will be narrower from midnight tonight than they have been for the past seven weeks," he says.
"Under this Act Police will only be able to enter private homes to break up gatherings that violate the rules on the numbers of people assembling, whereas under the previous powers they could do so for a number of reasons."
After the Bill passed, National MP Simeon Brown posted a video to Facebook claiming it was one of "the most extreme" pieces of legislation to ever be passed in Parliament.
"We all want to see the end of COVID-19 and we all want to unite in the fight against it, but we also want to protect our freedoms we have as New Zealanders and we want to protect our democracy. This Bill goes against that.
"It also gives extreme powers for enforcement officers to enter premises and close them down, and it gives the police the ability to enter your home without a warrant to ensure you aren't breaking any of the rules."
Before the Act passed, it sparked debate from the National Party over concerns it may give "too much power" to Prime Minister Jacinda Ardern. Although Dr Clark has more control under the new Act, the Opposition believes it's Ardern who holds the real power because it's unlikely he will act on anything without her approval.
National MP Gerry Brownlee argued that it "puts far too much power in the hands of one person: the Prime Minister" because there is also no mention of what advice she should take before making a decision.
And even then, the Director-General of Health still has the power to declare long-term emergency orders when necessary, bringing in strict measures Kiwis grew familiar with under lockdown, such as having to stay at home and refrain from travelling.
ACT leader David Seymour said the new law fails to balance the rights and freedoms and overall welfare of all New Zealanders with the Government's effort to control COVID-19, and he will not be voting for it.
"I have tried to work constructively to limit the power of the Director-General, making a democratically elected minister the only person with the power to issue long term orders, but the Government voted against that."
The Act will be automatically repealed unless it's continued by a motion in the House every 90 days or another agreed time period, meaning the law won't stay on the statute books beyond the period needed to respond to COVID-19.