You are not permitted to download, save or email this image. Visit image gallery to purchase the image.
Foreign Minister Winston Peters said he's just heard from MFAT officials that she has been let go.
National Party foreign affairs spokesman Todd McClay said Dreaver's detention had been unacceptable.
"Mr Peters must seek assurances from the Nauru Government that other members of the media will not be under threat of detention or interference.
"Freedom of the press is a fundamental part of any democracy and journalists must be free to tell important stories."
TVNZ's head of news and current affairs John Gillespie said Dreaver's media accreditation to cover the conference has been revoked since her release.
"After questioning her for nearly four hours, she was released," he said.
"Barbara's safe – we've spoken to her and she's in good spirits considering her ordeal."
Reports first suggested Dreaver was first detained after talking to refugees, World Vision said.
"World Vision New Zealand assisted TVNZ Correspondent Barbara Dreaver to connect with refugees on Nauru while she is there covering the Pacific Islands Forum," they said.
"We were contacted by our refugee liaison this afternoon, who let us know that Barbara's interview with a refugee had been stopped by the Nauru police, and Barbara was taken by them.
"We have had no contact with Barbara since then, but understand that Mfat is supporting her."
Gillespie said TVNZ isn't fully aware why she was detained and are working to put the pieces together.
"We don't have the full story. We're working with the Mfat to get information about what exactly went on here as a matter of urgency," he said.
The Ministry of Foreign Affairs said earlier that a Kiwi has been detained on Nauru but did not name them for privacy reasons.
An Mfat spokesperson said the "New Zealander and their family are receiving consular assistance".
Nauru's government has given limited media access to the forum and has allowed a small number of journalists to attend.
Earlier this year the Australian Broadcasting Corporation was banned from attending the event and triggered a boycott by other Australian media.
"The fact she was stopped from doing her job raises major concerns about media freedom," Gillespie said.
World Vision New Zealand national director Grant Bayldon said the detention raised questions about hosting the forum in Nauru.
"Refugees have effectively been held against their will for five years in cruel conditions and in breach of international law," Bayldon said.
"If Pacific Island Forum leaders don't speak out on this issue it's hard to see what the forum itself stands for."
Dreaver was also banned from Fiji for eight years after a story she covered about poverty in a village aired in 2008.
Nauru is home to an Australian detention centre with more than nine hundred refugees and asylum seekers.