"Osama bin Laden was responsible for the deaths of thousands of people, including New Zealanders, in several different parts of the world," Key told reporters.
"While his removal will not necessarily bring an immediate end to terrorist activity, I have absolutely no doubt that the world is a safer place without Osama bin Laden."
Key said that families who lost loved ones in Al-Qaeda attacks coordinated by bin Laden, including the September 11, 2001 attacks in the United States, would welcome US President Barack Obama's announcement of his death.
"All those families that lost loved ones as a result of the terrorist actions masterminded by bin Laden, they may now feel that, in some sense, justice has been achieved," he said.
Bin Laden was killed Sunday in a firefight with covert US forces in the Pakistani city of Abbottabad, northeast of the capital Islamabad.