SmartGate was launched at Auckland Airport and will begin operating in Wellington and Christchurch from next year.
The kiosk and gate system will allow all New Zealand and Australian electronic passport holders over 18 to clear passport control without needing to have their identity checked by a Customs officer.
"I've of course got everyone nervous because I've got my passport with me," he told those at the launch.
"I'm going to put it in the machine in a moment and if it doesn't work someone is probably going to die."
While the last quip drew plenty of laughter from the audience, there was also relief when Mr Key swiped his passport and had his face recognised by biometric technology - and the gate opened to let him through.
Deputy comptroller of customs John Secker said SmartGate represented probably the biggest single development in border processing in New Zealand in the past two decades.
People will have a choice whether they want to use the system or go through normal passport control.
