Prime Minister John Key says there is nothing more the New Zealand Government can do to encourage Fiji to return to democracy.
Fiji was suspended from the Commonwealth at midnight on Tuesday for an indefinite period after it failed to meet a deadline to announce a date for elections in 2010.
It is the second time Fjii has been suspended from the Commonwealth, a grouping of 53 former British colonies, dependencies and other territories.
In May, Fiji was suspended from the Pacific Islands Forum.
The Fiji government was warned in July this year that it faced full suspension if it did not commit to elections by 1 September. The military regime does not intend to allow elections before 2014.
The suspension means the Pacific nation will lose out on aid, technical assistance and will not be allowed to participate in Commonwealth meetings.
Fiji will also not be able to take part in sporting events, including the Commonwealth Games. However, teams taking part in internationally sanctioned events, such as the Wellington Rugby Sevens, can visit New Zealand.
Mr Key says hopefully interim prime minister Frank Bainimarama will now realise that the weight of international opinion is against him, and he should restore democracy.
However, Mr Key says New Zealand will not impose economic sanctions.
"We've tried to do our best. We've stood shoulder to shoulder with other leaders in the Pacific and the Commonwealth to try and enable some pressure to be put on Frank Bainimarama - but in the end, he's calling the shots."
Foreign Affairs Minister Mr McCully says the Commonwealth is held together by a shared commitment to democracy, the rule of law and human rights. He says Fiji has been given plenty of warning that it had to show some respect for those principles.
Labour Party leader Phil Goff says Fiji's suspension is unfortunate, but inevitable.
Former New Zealand Governor-General Sir Paul Reeves will visit Fiji next week as a special representative of the Commonwealth.
Suspension necessary sacrifice - Fiji
Fiji's military regime says its suspension from the Commonwealth is a necessary sacrifice as it pushes ahead with political changes ahead of elections in 2014.
Acting interim prime minister Ratu Epeli Ganilau told Checkpoint the regime was not going to bow to international pressure just to stay in the Commonwealth.
"This is just something we'll have to bear with till we get our own system in order like the political reforms and other things that needs to be changed before elections are done."
Ratu Epeli Ganilau says Fiji will not bring forward an election date, saying the country's roadmap has been set and will not be changed. Commodore Bainimarama is currently in Malaysia.
Fears for Fijian people
The spokesman for the New Zealand-based Coalition for Democracy in Fiji says the suspension impacts ordinary people who have no say under the military regime.
Nik Naidu says the fragile economy will be hit harder, making it even tougher for average Fijians.
Mr Naidu says Fiji is far more unstable than the regime believes and New Zealand and Australia must stay involved.
He says the situation could escalate at any time if people react to increased economic pressure.
An Auckland University academic says Fiji could find itself outside the Commonwealth until 2019 over its failure to hold elections.
Dr Steven Ratuva, a senior lecturer in Pacific Island politics, says the interim government has developed a psychological attitude that will isolate it further, notwithstanding overtures made to Asian and other economies.
Commodore Bainimarama came to power in a coup in December 2006. It was the fourth coup since 1987.
Fiji was expelled from the Commonwealth in 1987, but was readmitted 10 years later. It was also suspended in 2000 for 18 months.
The BBC reports the only other country to have been fully suspended from the group is Nigeria, during the rule of General Sani Abacha in 1995.
Pakistan was twice suspended from council meetings, and Zimbabwe was on course to be suspended when President Robert Mugabe pre-empted the move by walking out.