New Zealand, which has been largely virus-free since February, now has nearly 350 cases. The infection may be reaching its peak, Ardern said at a news conference. She added that the country may soon see the beginning of a plateau of cases, adding that caution was still required.
The PM announced that except Auckland and Northland, all of New Zealand can move one step lower to alert level 3 restrictions from Wednesday.
Level 3 restrictions mean businesses can only operate for online orders and contactless services, and bars and restaurants remain shut except for takeaways. 10 people are allowed to attend weddings and funerals.
Meanwhile, nearly 2 million people of Auckland and neighbouring Northland will still have to follow full level 4 lockdown, possibly for another 2 weeks, Ardern said.
On Friday, the country reported 70 new cases of COVID-19, all in the epicentre Auckland.
Though PM Ardern has been appreciated globally for her approach to handle the pandemic, the government is now being questioned over slow vaccine rollout and rising costs in a country heavily reliant on an immigrant workforce.
So far, only 21% of the country's 5.1 million people has been fully vaccinated. It is slowest pace among the wealthy nations of the OECD grouping.
Ardern has defended her government's position to follow 'Zero COVID' policy, saying elimination was the right strategy until everyone is vaccinated.
She said her goal was to vaccinate more people than any other country in the world and at this rate New Zealand is doing very well.