National party leader Bill English has conceded power after New Zealand First chose a two-party coalition with Labour.
Mr English, flanked by his wife Mary, and senior party colleagues, appeared emotional towards the end of a short press conference as he paid tribute to family.
Watch Bill English's speech:
He said Labour Party leader Jacinda Ardern's rise was "a remarkable performance" given that 10 or 12 weeks ago she was the deputy leader of a fading opposition.
Check out a recap of how we got here, find out what you need to know, and look back on RNZ's live coverage
New Zealand was a more confident country, in great shape, Mr English said.
"We wish the new government well in taking the opportunity that we have, which is a generational opportunity, for New Zealanders to build on economic strength but also deal with longstanding issues that New Zealanders want to see dealt with.
Bill English makes a concession speech after Winston Peters said New Zealand First would side with the Labour Party. Photo: RNZ / Richard Tindiller
"We will be by far the strongest opposition party that the Parliament has seen.
"From here the National party will regroup, we'll have a caucus meeting next week to discuss the outcome.
"This is MMP in New Zealand. The other parties at any given time ... with less support than us, have the opportunity to get together and form a government.
"We had satisfactory negotiations which would have been the basis of a strong effective government, they've chosen something different."
He said the result was an unusual one for an MMP government.
"We had satisfactory negotiations ... circumstances meant that he [Mr Peters] had more influence on forming a government than we did."
Bill English makes his concession speech. Photo: RNZ / YouTube
On finding out at the same time as the public what New Zealand First had decided, Mr English said he accepted the result.
"New Zealand has a way of adapting these things. It's an unusual result for MMP. We all know the rules, we play by them.
"This is the result ... we certainly accept it."
He said there were opportunities for the new government.
"The economy's in pretty good shape actually.
"I am naturally disappointed particularly for the 44.5 percent of people who voted for us but also for the team but I think more particularly New Zealand has some very special opportunities as a result of being in such good shape."
Mr English's wife Mary said she was proud.
"I am feeling very proud of my husband, I'm feeling very proud of my family and I'm feeling very proud of my party, the National party," she said.
National MP Paula Bennett said she was disappointed.
"This party of ours is pretty strong, and we're ready to pick ourselves up."
