The decision to ban shark finning has been hailed as "a great victory" by the Green Party.
The Government has decided to ban the practice and has tightened the timetable for eradicating shark finning in New Zealand waters.
The ban follows 45,300 submissions on the National Plan of Action for the Conservation and Management of Sharks.
The plan has a tightened timeframe for the implementation of shark protection measures including a ban on shark finning. The first tranche of species will be covered by the ban in October 2014, with a second tranche following in October 2015. Blue sharks will be covered in October 2016.
"The Green Party has been pushing for an end to shark finning for over 5 years; this is a great victory," said Green Party Oceans Spokesperson Gareth Hughes.
"Shark finning is an incredibly wasteful and inhumane practise; it is like killing an elephant just for its tusks
"Today, we can proudly join nearly 100 countries all over the globe that have banned shark finning."
However the Greens would like to see the timeframe shortened for the inclusion of the blue shark into the ban.
"The blue shark is highly migratory, highly targeted, and highly vulnerable. It needs the protection of a finning ban as soon as possible, and 2016 is simply too far away," Mr Hughes said.
Shark fins are valuable for making shark fin soup which is a delicacy in Asia, and for the production of many traditional Asian medicines.
The new laws mean New Zealand will join around 100 countries and states, including Australia, the EU and US, to ban shark finning.
Conservation Minister Nick Smith said the submissions supporting the proposal to ban finning show New Zealanders' attitudes to sharks have come a long way since the 'Jaws' days.
"It is now widely recognised that sharks are an important part of the marine ecosystem and that we need to ensure the 113 species of shark in our waters survive," Mr Smith said.
Primary Industries Minister Nathan Guy said it is already an offence under the Animal Welfare Act to fin a shark and return it to sea alive. Under the extended ban, it will also become illegal to catch a shark, kill it, remove its fins and dump the carcass at sea.
New Zealand Shark Alliance has also welcomed the new laws to ban shark finning but is disappointed it will be almost three years before they take full effect.
"Thousands of blue sharks, which are the species most often caught just for their fins in New Zealand waters, may be killed just for their fins before the law is in place," says New Zealand Shark Alliance (NZSA) spokesperson Karli Thomas.
"Most blue sharks are caught as bycatch and pulled into the boats alive. Many could be released unharmed. To continue finning blue sharks is a senseless waste and there are no excuses for a delay of almost three years."
NZSA says globally around 270,000 sharks are killed every day and the trade in shark fins is driving much of the slaughter.