Jacinda Ardern resignation: What happens inside the room when Labour chooses new leader?

The Labour Party will at the weekend work to decide on its first new leader since Jacinda Ardern replaced Andrew Little ahead of the 2017 election.

Voting will take place on Sunday, with potential candidates needing the support of at least two-thirds of the party's caucus.

Labour's president Jill Day told RNZ's Morning Report she was confident the caucus would reach a consensus on who the party's next leader would be.

"The key thing is that we want to make this decision quickly and decisively so that we can continue to focus on New Zealanders, and make sure to enact the policies that are important for New Zealanders who are facing a really challenging time."

How will the vote work? 

"There can be multiple votes," Day explained. "It's a process whereby you can actually have many iterations."

That voting would happen behind closed doors.

But, should a consensus not be reached, the wider Labour membership will decide who will lead the party and become New Zealand's next Prime Minister.

"Obviously, if it gets to a situation where the votes aren't changing… then it comes to the party," Day told Morning Report.

"We'll work through those details if needed and, yes, in that situation it splits as 40 percent vote for MPs, 40 percent for party members and 20 percent for affiliated unions.

"It's very much an internal process for the party."

Ardern announced her resignation in a speech on Thursday while also announcing this year's election would be held in October.

The candidates favoured to succeed Ardern include Chris Hipkins, Kiri Allan and Michael Wood.