It's farewell from John Key

John Key has been farewelled as Prime Minister with a guard of honour formed by his colleagues in front of Parliament.

Mr Key formally resigned this afternoon, after his former deputy Bill English was confirmed this morning as the new leader of the National Party.

He announced last Monday that he planned to step down, after eight years in the top job, saying he felt that it was "the right time to go".

After briefly addressing media, Mr Key and his wife Bronagh left Parliament through the front doors, and were greeted outside by a cheering crowd of several hundred supporters.

National Party MPs formed a guard of honour down the steps, with Mr and Mrs Key individually thanking them as they made their way to a waiting Crown car.

They were greeted at the bottom of the steps with hugs and handshakes from Mr English and his wife, Mary.

One supporter remarked to another as the Keys were driven away that he felt "bereft".

Mr English and his new deputy, Paula Bennett, were officially appointed in a short ceremony at Government House that concluded about 3pm.

Mrs English and the couple's six adult children all attended, along with Mrs Bennett's family, cheering loudly when Governor-General Dame Patsy Reddy congratulated him.

About 100 guests were at the ceremony and a celebratory afternoon tea afterwards.

Dame Patsy said Mr English and Mrs Bennett's families would be important support for them in their new roles.

'Trust your gut'

Just before leaving Parliament, Mr Key said his advice to his replacement was to "trust your instincts".

"When you are Prime Minister, you often have to make decisions and comment on things without perfect information. You can't be prepared for every question and every situation, and you just simply have to trust your gut."

Mr English would make a "fine" leader and Mrs Bennett would be "outstanding" as his deputy, he said.

While his replacement was more socially conservative than him, due to his Catholic beliefs, his ideas were always well thought through, Mr Key said.

Mr Key had endorsed Mr English for the role.

Mr Key reiterated that his biggest successes were economic leadership and having navigated the country through a series of crises.

He also said he would retain his blind trust until he left Parliament.

Mr Key will head to Hawaii tomorrow, where he said he might meet with outgoing US President Barack Obama.

"We have chatted about it last week but he's still President of the United States and he's got a big day job."