New Zealand's Queen and head of state died early in the morning local time, with Ms Ardern woken by "a police officer shining a torch into my room" to be told the news.
Speaking in Wellington alongside a framed picture of Her Majesty shortly after, the prime minister said New Zealand was experiencing "a time of deep sadness".
"I know I speak for all New Zealanders in conveying our deepest sympathy to members of the Royal family and condolences to King Charles III at this time of enormous loss," she said.
"A chapter is closing today. With that we remember an incredible woman that we were lucky to call our Queen.
"She was extraordinary.
"She was a woman who worked into her 90s.
"The last days of the Queen's life captures who she was in so many ways, working to the very end on behalf of the people she loved."
New Zealand's official mourning will continue until a State Memorial Service, held after the Queen's funeral which is expected in around 10 days.
Flags will be flown at half-mast until the funeral, except on Proclamation Day, when King Charles III is officially announced.
Kiwis will be invited to sign condolence books at parliament and the National Library, and offered sites to leave flowers.
Ms Ardern recalled her first meeting with the Queen, when she gifted a picture of Her Majesty laughing on an early visit to New Zealand, decades ago.
"Not only did she remember the visit, she could remember what was making her laugh," she said.
"That speaks to me of someone who gave a life of service but who also enjoyed the role that she played a difficult I'm sure as it was."
New Zealanders are generally more supportive of the monarchy than Australians, with no similar governmental moves towards a shift.
The most recent substantive poll on the matter, taken last November, asked voters whether they would like to shift to a republic on the occasion of Queen Elizabeth II's death: 44 per cent were in favour, with 50 per cent opposed.
Ms Ardern has said she has "never sensed urgency" from Kiwis to move to a republic.
New Zealand's most popular broadcaster Mike Hosking cried on air, saying "I don't know that I can do this, just give me a couple of minutes".
Opposition leader Chris Luxon also paid tribute to Queen Elizabeth's "unflinching dignity, compassion, and selflessness".
"The strength and stability of Her Majesty's leadership of the Commonwealth was a reassuring anchor for New Zealand and New Zealanders in uncertain and changing times," he said.
Queen Elizabeth II visited New Zealand 10 times, last travelling in 2002.
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