Prime Minister John Key says it is important there is now a peaceful transition of power in Egypt, as the people there look forward to electing a new government.
Egypt's military authorities are pledging to oversee a transition to civilian rule, as the celebrations in Cairo's Tahrir Square continue for a second day.
A day after the resignation of President, Hosni Mubarak, the military announced it had asked Egypt's current government to stay on until a new one was formed.
Mr Key says Egypt has been a stabilising force in the Middle East and the Government here would like to see that continue.
He says the formation of any new government is going to take some time.
And Mr Key says it's important for the Egyptian people that they have the chance to vote in free and fair elections.
Mr Key says with the political change in Tunisia, and now Egypt, similar actions in neighbouring countries cannot be ruled out.
Decision welcomed
New Zealand has welcomed Mr Mubarak's decision to step down.
Foreign Affairs Minister Murray McCully says the Government hopes Egypt's military will act with restraint and show respect for the wishes of the people.
But, he says, creating a peaceful transition in Egypt and stability within the region will be challenging.
Mr McCully says the stability of Egypt and the Middle East depends on shifting from protest and confrontation to dialogue and cooperation.
