The unemployment rate fell for the first time since the end of 2007 after hitting a decade high of 7.1 percent in the last quarter of last year.
The seasonally-adjusted figures showed the number of unemployed people fell by 25,000 to 140,000 in the March quarter, Statistics New Zealand said.
New Zealand slumped into recession at the start of 2008, emerging only in the second quarter of last year with economic growth picking up to 0.8 percent in the three months to December compared with the previous quarter.
The number of people employed in New Zealand rose by an unexpectedly large one percent in the March quarter to 2.18 million, Social Development and Employment Minister Paula Bennett said.
She added that New Zealand still had a long way to go in reducing unemployment, which hit a low of 3.5 percent at the end of 2007.
Economists said they were surprised by the big fall in unemployment, and said it strengthened their belief the central bank would start raising the official interest rate next month from its current record low of 2.5 percent.