Economic Development Minister Stuart Nash said he was disappointed by the decision.
"The government was informed of the decision yesterday," Mr Nash said.
Amazon Studios advised post-production work on Season One would continue in New Zealand until June 2022.
However Season Two would be filmed in the UK as part of a strategy by the studio to expand its production space and consolidate its footprint in the UK.
“I am enormously proud of the New Zealand screen sector. The Amazon Studios’ decision in no way reflects the capabilities of our local film industry or the talents of the people who work in it. This is a multi-national company that has made a commercial choice.
“With Season One, the New Zealand screen sector has proven its reputation for offering a world-class workforce, globally competitive sound stages and post-production facilities, and a safe destination with outstanding scenery and friendly and welcoming people.
“The previously agreed Memorandum of Understanding (MoU) with Amazon Studios will no longer proceed in its current form. The five percent incentive previously offered on top of the standard 20% rebate for all international film productions is withdrawn.
As with every other international production, Amazon Studios was eligible for a 20% rebate on its qualifying production expenditure in this country, under the terms of the International Screen Production Grant.
It was estimated that Amazon Studios’ qualifying local expenditure totals around NZD $663.74 million so it could potentially be eligible for a NZD $132 million rebate under the 20% rule.
“The international film sector is incredibly competitive and highly mobile. We have no regrets about giving this production our best shot with government support. However we are disappointed for the local screen industry. Work will continue across government on ways to keep supporting the sector,” Stuart Nash said.
