Prime Minister Jacinda Ardern made the announcement at this afternoon's daily coronavirus update, accompanied by Director-General of Health Ashley Bloomfield.
Ms Arden said Cabinet was meeting at 10.30am tomorrow and a decision on whether New Zealand will come out of lockdown would be announced to the public at 4pm.
She said a move to Level 3 would not be a return to pre-Covid life, and the ongoing battle was a long-term one.
She added that returning to a normal social life would potentially allow the virus the spread.
New Zealanders had stayed home and saved lives, and Google data backed that up by showing fewer visits to beaches and parks, Ms Ardern said.
"I know it hasn't been easy but it has been working."
Criteria on which to base the decision to come out of lockdown included testing and contact tracing capacity, community transmission, border restrictions, and the capacity of the health system.
Economy and public attitudes, businesses' ability to comply with restrictions, and the Government's ability to enforce those restrictions would also be looked at.
Ms Ardern said the decision to move into the lockdown was the right one, and she thanked small businesses because no one underestimated how hard it has been for them during the lockdown.
She made two pleas to New Zealanders: "If you even have a sniffle or a sore throaght, get a test.
"And record you movements s if we may come and interview you tomorrow to ind out who you've been with."
Dr Bloomfield said the Ministry of Health's contact tracing system was "not particularly easy" to get information out of, and it was being updated "at pace" and might be at a gold standard within a week.
