John Key is shocked by the Pope's resignation, describing the move by the 85-year-old as a "brave call".
Pope Benedict XVI has declared he lacked strength of mind and body to continue as head of the Catholic Church worldwide, and will step down on February 28 - becoming the first pontiff to do so in 600 years.
"This is a position where people normally carry on for all of their natural life once they've been appointed to being the pope, so it's a very surprising move," said John Key told TV3's Firstline.
"He obviously feels the great burden and responsibility of leading the Catholic Church and maybe just feels his health isn't allowing him to discharge his responsibilities adequately and at the level he would want," he said.
The Pope made the announcement during a meeting of Vatican cardinals.
"After having repeatedly examined my conscience before God, I have come to the certainty that my strengths due to an advanced age are no longer suited" to the demands of being the Pope, he told the cardinals.
His unexpected announcement has shocked Catholics around the world.
Catholic Church spokeswoman in New Zealand, Dame Lyndsay Freer, described the Pope's schedule as "punishing".
"We will miss Benedict because he was a man with a big heart and a very loving, humble personality and a great intellect," she said.
"But I think the church goes on and Benedict will leave a great legacy, a different legacy from his predecessor, and the next pope will leave a different one again. We just know it will be business as usual once this all gets settled."
The cardinals will be assembling in Rome ahead of a mid-March conclave to elect a new pope, Dame Lyndsay told Firstline.
The process involves secret ballots until they reach a consensus, and a new leader is expected by Easter.