Surgical mesh will no longer be used in some operations because of safety concerns.
ACC has paid out more than $13 million in injury claims to hundreds of patients who had problems with the mesh in the last decade.
Some of the injuries include the mesh eroding in the body, binding with other tissue, and causing extreme pain.
The mesh is also the subject of thousands of lawsuits in the United States.
This afternoon, Medsafe said the mesh would no longer be able to be used for the repair of pelvic organ prolapse or stress urinary incontinence.
Stewart Jessamine, from the Ministry of Health, said New Zealand was the second country to restrict the use of mesh, after Australia did so last month.
"There's no doubt that for women who have had these surgeries this has been a tragedy at a personal level in up to 10 to 12 percent of women who've had mesh used in this way."
Mr Jessamine said the mesh would still be used for hernia repairs.
Carmel Berry, the co-founder of advocacy group Mesh Down Under, is welcoming the news.
She said it was what her organisation had been asking for since 2014.
But she said there was still more work to be done, including a register for the mesh that will still be used.