New Zealand Prime Minister Chris Hipkins (R) has conceded the election (Picture: EPA / AP)

New Zealand Prime Minister Chris Hipkins on Saturday conceded his Labour Party had lost the general election and was not in a position to form government.

Conservative Christopher Luxon is now set to become the country’s next prime minister after NZ Labour suffered a ‘nightmare’ result.

With over 80% of votes counted, the latest projections suggests that National would win 50 seats, Labour 34, the Greens 13, Act 12, NZ First 8 and Te Pāti Māori four seats.

New Zealand operates a proportional representive voting system, and the exact makeup of Luxon’s conservative government is still to be determined.

Prime Minister Chris Hipkins, who spent just nine months in the top job after taking over from Ardern in January, told supporters late Saturday he had called Luxon to concede.

Hipkins said it wasn’t the result he wanted.

“But I want you to be proud of what we achieved over the last six years,” he told supporters at an event in Wellington.

Ardern unexpectedly stepped down as prime minister in January, saying she no longer had “enough in the tank” to do the job justice. She won the last election in a landslide, but her popularity waned as people got tired of COVID-19 restrictions and inflation threatened the economy.

Her departure left Hipkins, 45, to take over as leader. He had previously served as education minister and led the response to the coronavirus pandemic.

The Labour Party PM has admitted his party will not be able to form New Zealand’s next government.