Dramatic video posted on social media shows the plane arriving, with smoke billowing behind it.
"Just after 4pm this afternoon NZ5366 travelling from Christchurch to Wellington landed safely after smoke was seen coming from the engine," Air New Zealand Head of Flight Operations, Hugh Pearce said in a statement.
"The aircraft was met by emergency services and all passengers have disembarked safely.
"The cause of the incident is not yet known. We expect some disruptions to flights in Wellington as a result."
A Fire and Emergency NZ spokesperson confirmed to RNZ they were called to an engine fire shortly after 4pm on Sunday.
The FENZ spokesperson said the fire had been extinguished by the time emergency crews arrived at the scene.
The plane landed safely and 40 passengers disembarked.
Video showed them jumping from the emergency doors.
Multiple flights have been diverted from landing in Wellington, the airport website shows.
