Offshore oil and gas exploration permits are no longer granted by the New Zealand government as part of its commitment to clean energy futures.
The move will not affect existing exploration or extraction permits, meaning that the industry is likely to continue to exist in the nation for several decades.
The decision under Prime Minister Jacinda Ardern is a change of direction after nine years of conservative leadership, which favored the expansion of the industry.
Ms. Ardern, who was elected Prime Minister last year, has pledged to reduce the country's net greenhouse gas emissions to zero by 2050.
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The oil and gas industry in New Zealand is relatively small, employing about 11,000 people, or about 1 percent of the total economy.
It matters in agriculture and tourism
But industry is important to the Taranaki region, where most of the activity is centered.
New Plymouth Mayor Neil Holdom told Radio New Zealand the move was an "advocacy for the future of the Taranaki economy."
But Mrs. Ardern said nobody would lose their jobs as a result of the move.
"We are creating the right balance for New Zealand," said Mrs. Ardern.
"We protect the existing industry and protect future generations from climate change."
Movement is described as "economic vandalism"
Jonathan Young, a member of the New Zealand National Party, described the move as "economic vandalism".
"This decision is completely pointless, it certainly has nothing to do with climate change," said Young.
"These changes will simply shift production elsewhere in the world, not reduce emissions."
The idea of extending offshore drilling has proved controversial in New Zealand, especially after other issues such as the Gulf of Mexico's Deepwater Horizon 2010
Greenpeace environmental group welcomed Mrs. Ardern's move.
Russel Norman, executive director of the group in New Zealand, said the country "has prevailed against one of the most powerful industries in the world".
The announcement does not apply to onshore exploration permits.
The government said they would be continued for the next three years and then reviewed.
Oil and gas,