It was established by royal warrant on 30 May 1996 by Elizabeth II, Queen of New Zealand, "for those persons who in any field of endeavour, have rendered meritorious service to the Crown and nation or who have become distinguished by their eminence, talents, contributions or other merits",[1] to recognise outstanding service to the Crown and people of New Zealand in a civil or military capacity.

[2] The change came about after the Prime Minister's Honours Advisory Committee (1995) was created "to consider and present options and suggestions on the structure of a New Zealand Royal Honours System in New Zealand, which is designed to recognise meritorious service, gallantry and bravery and long service".

After initially declining redesignation in 2009, Vincent O'Sullivan and Sam Neill accepted the change in December 2021 and June 2022, respectively.

Titular honours were incorporated into the new system before its implementation in 1996 after the National Party caucus and public debate were split as to whether titles should be retained.

[citation needed] In April 2000 the then new Labour Prime Minister, Helen Clark, announced that knighthoods and damehoods had been abolished and the order's statutes amended.

[17] In 2009, Prime Minister John Key (later to become a Knight Grand Companion himself) restored the honours to their pre-April 2000 state.

The government did not comment on its position regarding knighthoods and damehoods, but Prime Minister Jacinda Ardern did specifically congratulate two women on becoming Dames Companion.

[22] On leaving office in 2023, Ardern accepted appointment as a Dame Grand Companion, formally receiving investiture in 2024 from Prince William.