On Friday, Ardern described the moment she realised she would become prime minister, when Peters started talking about all New Zealanders sharing in the nation's wealth.
The announcement ended nearly a month of uncertainty, and weeks of negotiations, conducted by Peters with Ardern and the incumbent Prime Minister Bill English's National party over who could form the next government. Peters did not tell Ardern or English his decision before announcing it live on television.
Outgoing Prime Minister Bill English, who appeared emotional, said he was naturally disappointed but felt he'd left New Zealand in good shape and that the country has plenty of opportunities ahead. He was also 37, but born later in the year.
Ardern reiterated that she is committed to having 50% of her caucus made up of women - a goal she is yet to achieve.
The announcement came after September's election returned a hung parliament.
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Ardern expressed confidence her new government would see out its full term, despite long-standing tensions between junior coalition partners the Greens and New Zealand First (NZF).
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Green Party leader James Shaw said current laws meant the entire drug trade was being controlled by gangs.
Choosing to back Labour over National, which had been in government since 2008, was representative of the country's vote for "change", Peters said.
"A country where our environment is protected, where we look after the most vulnerable, where we support our families, where we make sure people have the most basic of needs, like a roof over their head".
Praising Ardern's "extraordinary talent" in the campaign, Peters backed her pledge to build thousands of affordable homes per year. Ardern said the details would be released in the coming days.
After she took control of Labour, the party surged in the polls, leading the press to coin the term "Jacindamania". It's traditional for political leaders to congratulate and welcome newly elected colleagues from around the world, and given Australia's close relationship to New Zealand it might have been fair to expect the same thing this time around.
Ardern said Australian Prime Minister Malcolm Turnbull had called her and their conversation was "incredibly warm and friendly".