The former businessman will become the country's new prime minister after people voted for change following six years of a liberal government, led for most of that time by Jacinda Ardern.

Mr Luxon arrived to loud applause at an event in Auckland, where he was joined by his wife, Amanda, and their children, William and Olivia.

He said he was humbled by the victory and couldn't wait to get started, thanking people from across the country.

"You have reached for hope and you have voted for change," he added, as supporters chanted his campaign slogan that promised to get the country "back on track".

Mr Hipkins, who was in the job for just nine months after Ms Ardern unexpectedly stepped down in January, saying she no longer had "enough in the tank" for the role, told supporters he had conceded defeat.

"But I want you to be proud of what we achieved over the last six years," the Labour leader said at an event in Wellington.

The centre-right National Party - which is currently in opposition - will form a new government with its preferred coalition party ACT, having won 40% of votes.

With most votes counted, Labour got 26% of the vote, while ACT had 9% - meaning the National-ACT majority is slim and still may need support from populist party New Zealand First to form a government.

In a result that could be particularly stinging for Labour, the National Party is in a tight race for Ms Ardern's old seat, Mount Albert.

The seat has long been a Labour stronghold and was also held by another former Labour prime minister, Helen Clark.

Longtime conservative pollster David Farrar said there is still a good chance Labour will hold the seat, but his initial impression of voting across the country was that it's a "bloodbath" for the left.

Mr Luxon has promised tax cuts for middle-income earners and a crackdown on crime.

Mr Hipkins, meanwhile, had pledged free dental care for people younger than 30 and the removal of sales taxes on fruit and vegetables.

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Under Ms Ardern, Labour in 2020 became the first party to secure an outright majority since the country switched to a mixed member proportional system in 1996.

But Labour has since lost support, with many in New Zealand dissatisfied over the country's long COVID lockdown and the rising cost of living.

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