New Zealand’s prime minister on Monday announced to pick country’s first indigenous woman foreign minister, terming the 20-member Cabinet "incredibly diverse".

Jacinda Ardern named Nanaia Mahuta as her foreign minister as the new Cabinet will be sworn-in on Friday.

"Nanaia [Mahuta] has in her last term has got experience... She is someone who builds fantastic relationships very, very quickly and that is one of the key jobs in foreign relations," Ardern said during a news conference in Wellington streamed live on the social media.

Ardern’s Labor Party won historic landslide victory in general elections last month winning 64 seats to form a government on its own.

"The next three years will be very challenging for New Zealand," Ardern said, as the country braces for economic recovery amid COVID-19 pandemic.

"With the global outlook worsening we won’t be immune to the ongoing effect COVID-19 is having around the world," she added.

The Labor Party has signed a fresh agreement with New Zealand’s Green Party to "working together to make progress on important areas like climate change, environment and child and community wellbeing issues over the next 3 years."

The parties were in coalition in the last government.

Mahuta is a lawmaker from Hauraki-Waikato constituency who has spent more than two decades in New Zealand Parliament.

She has served as the minister for Maori [indigenous peoples] development and minister for local government, besides an associate portfolio in trade, in the first term of Ardern government which ended last month. 

The Maori lawmaker, with a tattoo on her chin, will retain the local government job and will keep an associate role in Maori development.

“I am excited by this team,” Ardern said about her Cabinet.

The prime minister named Grant Robertson as her deputy and Andrew Little as Health Minister.

Phil Twyford has been demoted and will serve as minister outside Cabinet with the disarmament portfolio.

Jenny Salesa has also been dropped from Cabinet and the executive.

Chris Hipkins has been picked as minister for COVID-19 response.

"Much of what we're focused on is making sure we've got our economic recovery hastened," Ardern said. “If ministers don't deliver, they will be shown the door."