Chris Hipkins is set to take the reins of the premiership from outgoing PM Jacinda Ardern, who handed over the Labour party leadership to the new candidate in Wellington on Sunday.

The backing of party MPs paved the way for the ascension of Hipkins, who will become the country's next prime minister.

Hipkins will be officially sworn in as New Zealand's 41st prime minister on Wednesday.

The pair — longtime friends and political allies — walked side by side through the halls of NZ's parliament house before the caucus vote in a show of unity.

Earlier, Hipkins became the sole nominee from Labour's caucus to succeed Ardern as leader after her exit announcement on Thursday.

On entering the meeting, the pair hugged and were met with huge applause.

The 64-member Labour caucus unanimously voted for the 44-year-old as party leader, with the current education minister running uncontested for the role.

The vote was essentially a formality, as party members rallied behind Hipkins after Ardern's announcement to avoid a drawn-out leadership contest in the lead-up to this year's New Zealand election.

Soon after the go-ahead from the party majority, Hipkins said his government would focus on the "bread and butter" issues that low- and middle-income New Zealanders, as well as small business owners, faced.

He said his government would be focused on helping families struggling "through these tough economic times", making a note of inflation and housing affordability issues faced by New Zealanders.

"You shouldn't have to be on a six-figure salary to buy a new house," he said.

He vowed to re-focus on the government's agenda ahead of a cabinet reshuffle, as well as pledging to strengthen the country's public services.

Hipkins also showered praise on his "very good friend" Ardern for her leadership, noting she was a particular inspiration for women and girls worldwide.

Hipkins became a household name fronting the New Zealand government's response to the Covid-19 pandemic.

He was appointed health minister in July 2020 before becoming the Covid response minister at the end of the year.