New Zealand Prime Minister Jacinda Ardern's Labour Party on Sunday (November 1) signed an agreement with the Green Party to form the government in the Pacific nation of nearly five million people.

Ardern earlier this month delivered the biggest election victory for her centre-left Labour Party in half a century. Although she no longer needs support from other parties to govern, coalitions are the norm in New Zealand as parties look to build consensus.

The Greens are obliged to back the government over decisions made in their portfolios but are otherwise entitled to take a different position to Labour. "I'm again really proud that we have a good mandate, because it shows that this is a cooperation agreement that is a win-win for the Greens," the Green Party's co-leader Marama Davidson said.

Prior to the October election, the Labour Party was in a governing coalition also with the Greens and New Zealand First.