UPDATED 2.51pm: Prime Minister John Key has announced that the next Governor-General will be Dame Patsy Reddy.

She will be just the third woman to hold the post.

Dame Patsy's to serve a five year term starting on September 14th this year, replacing the incumbent Governor General Sir Jerry Mateparae.

John Key is delighted Dame Patsy has accepted the role, and believes it was important to have a woman in the role. 

"She is a passionate New Zealander, a well-respected businesswoman, and a staunch supporter of our creative sector."

"When we've had women in the most senior positions in our country, whether they are as Governor-General, Chief Justice, Prime Minister or the head of our corporations, it's aspirational for young New Zealand women," Key said. 

Dame Patsy said she wants to bring the proper dignity and mana to the role, but won't take herself too seriously.

"I like to be relatively informal, I'm an enthusiastic person. I enjoy meeting people and I enjoy getting to know different aspects of the community."

Dame Patsy also said she did have some initial hesitation about taking the job, because she's so different from those who've come before her.

"Their previous careers have been largely dedicated to public service, either members of the judiciary, military, church, and politics, and frankly I don't fit this mould."

The 63-year-old lawyer most recently worked with Sir Michael Cullen on the review of legislation relating to the country's intelligence agency.

She has also been a lecturer at Victoria University.

Dame Patsy is the chair of the film commission, deputy chair of NZTA and chief negotiator for treaty settlements in the Bay of Plenty.

Labour Party leader Andrew Little congratulated Dame Patsy on her appointment.

"I think she'll be very good role, she's achieved a lot in terms of other work that she's done," he said.

Green Party co-Leader Metiria Turei was less effusive in her opinion:

"I didn't like the result of the Intelligence and Security review that she was part of, but I don't know enough about her to say whether she'd be good at the job or not," Turei said.

Winston Peters hasn't been forward with compliments either.  He's instead accusing the Prime Minister of using the appointment to deliberately draw attention away from the flag referendum.

"It is time to detour, side track and divert attention from the final days of the count for the poll on the flag."