Wellington: New Zealand Deputy Prime Minister and Finance Minister Bill English has secured enough caucus votes to become the country's new prime minister, after John Key announced his resignation.

Mr English went past the threshold he needed after a flurry of Nationals caucus members expressed their support for him. A formal appointment  will take place during a party room meeting on Monday.

He had earlier emerged as the likely next leader after his closest competitor for the prime ministership dropped out of the race on Thursday.

Police Minister Judith Collins said it had become clear that English had the support of half the 59-member caucus.

"As far as I'm concerned, he has won," Ms Collins told reporters in Wellington earlier. "I would like to say to my supporters that we should get in behind him and support Bill as the leader."

The snap race for the top job was prompted by Mr Key's sudden resignation on Monday. Mr Key has been New Zealand's leader since 2008, heading up the National Party, over a period marked by political stability and economic reform.

Health Minister Jonathan Coleman, the only other candidate, had said he was not conceding, but the more junior lawmaker was considered unlikely to get enough support to pose a real challenge.

English further shored up support by naming senior cabinet minister Steven Joyce, the minister for economic development, as his finance ministry replacement if he won the top job.

"If I become the leader that will be the case," English told reporters. "I have worked with Steven for the last eight years. He has got a fantastic set of skills."

Joyce had been considered a potential threat to English.

Reuters