Labour leader Andrew Little tweeted shortly after the shock announcement, wishing Key all the best.
"John Key has served New Zealand generously and with dedication. I wish him and his family the best for the future."
Fellow National MP Steven Joyce has called Key's decision "courageous".
New Zealand First Leader Winston Peters said of the resignation: "The fact is that the economy is not in the healthy state that the Prime Minister has for so long claimed, and there are other issues which have caused this decision as well.
"The New Zealand public should have been informed of this a long time ago.
"Clearly the Prime Minister does not believe the superficial polls any longer.
"Contrary to certain perceptions the Prime Minister and his Finance Minister are unable to muddy the waters anymore."
Green Party co-leader Meteria Turei has said that whilst she fought against Key's politics, she "always supported his right to be a dad & a husband first".
In a statement, co-leader James Shaw also thanked the Prime Minister for his services on behalf of the party and its MPs.
"No matter your political allegiance, you have to respect someone who chooses to make the personal sacrifices required to be our country's Prime Minister.
"I would like to pass along our best wishes to him for whatever his future holds, and to his wife, Bronagh, and children Stephie and Max as well, who I'm sure have made many sacrifices of their own.
"Being the leader of a major political party, and indeed the country, is not an easy job; Mr Key should be applauded for his commitment to public service and to New Zealand," said Shaw.
ACT Leader David Seymour also offered his support of the PM, congratulating him on his "noble" resignation.
"Under John's leadership, the Government has steadfastly maintained New Zealand's policy settings. As a result, we remain at the top of almost every international league table for good policy settings. In the long term, all Prime Ministers are judged for the policies they leave behind, and John will be judged well.''
Kiwis have taken to social media to express their shock at the news of Key's resignation.
"Was talking about John Key stepping down from PM with some friends last night but wouldn't have picked an announcement 18 hours later," wrote another.
