Prime Minister Jacinda Ardern confirmed today that the traffic light system "absolutely" allowed for regional differences, so some areas could move to orange before others.
Speaking to TVNZ's Breakfast, she said the main consideration for Cabinet was pressure on the health system.
"When it comes to where we are, red or orange, we know we've peaked in Auckland ... looks like the same in the Wellington area, but there are other parts of the country where that's not quite the case - we're either plateauing or still seeing an increase," said Ardern.
Today is the last day vaccine passes are mandatory. And vaccine mandates will be limited to the health and disability, aged care, Corrections and border workforce sectors.
The removals of some pandemic health measures and changes to others are based largely on expectations the Omicron wave has peaked.
Last week was the deadliest of the pandemic, with 122 people dying.
Ardern said experts believed that the impact of vaccine passes was now "really marginal" due to high vaccination rates and the country already having its first peak of Omicron.
The impact of those passes had lessened and the role they played changed.
Ardern told RNZ people certainly shouldn't see the removal of vaccine passes as the end of Covid-19 and the end of restrictions.
"This will be our first wave and not our only wave. This is our current variant and not our only variant."
People were still being asked to wear masks, but there were also people who had legitimate reasons not to wear them.
"When someone is not wearing a mask they will also be questioned and they will sometimes be questioned by members of the public or by people working in spaces where they are required."
The Government was not looking at dropping mask wearing in both the red and orange traffic light settings. Studies showed they cut transmission risk and made it safer for everyone, she said.
Ardern said they would still be cautious around changing settings as they didn't want too see cases number rise again as a result of it.
New case numbers yesterday fell below 10,000 for the first time since February - but the Ministry of Health said lower testing and reporting was typical for weekends.
"It's also an important reminder to remain vigilant," the ministry said.
There were 690 people with Covid-19 in hospital, down from the 830 hospitalised on Friday.
People displeased about fumbling around with vaccine passes and the associated scanners can expect some relief this week.
From 11.59 tonight, the My Vaccine Pass is no longer compulsory, although individual businesses can still use the system if they want to.
The ministry said with pass restrictions easing, it was important for people to keep following public health advice to stay at home if feeling unwell.
This week will bring changes to the strictest traffic light setting, with indoor capacity limits under red settings increased from 100 to 200, and outdoor capacity limits removed.
Wellington bar owner Matt McLaughlin said removing the vaccine passes was a good step to get back to "some sort of normality" and be able to welcome everyone back into their venues.
However, he was nervous that they would also lose some custom because the older generation was still a bit nervous and risk-adverse so may stay away.
McLaughlin told RNZ hospitality venues were safe to visit and he hadn't caught Covid-19 from staff who had it due to mask wearing and the other rules in place. He said people would have to wear masks as they were the rules.
For most customers, mask wearing had been the norm for the last little while so he didn't think it would be an issue.
Instead of having to check vaccine passes, they would now be able to take the time to welcome them and sit them down.
While he would love to get more support from the Government as an industry they were pretty realistic and he personally didn't hold any hope of getting any more assistance.
It had been really really tough for businesses and some had already folded, he said.
The less strict orange settings have a requirement for workers to wear masks at indoor events but do not have gathering limits.
"If the trends we're seeing continue in Auckland, I think a move to orange would be reasonable," Covid-19 modeller Professor Michael Plank said.
Cabinet will discuss related proposals today, ahead of the 4pm post-Cabinet press conference.
Older and younger New Zealanders are at odds over the decision to remove vaccine mandates, according to one new poll.
