Transparency International NZ chair Suzanne Snively said the New Zealand public sector agencies had successfully worked on "developing processes that prevent corruption".
This contributed to the country's stand-out reputation for a trusted public sector, she said.
"New Zealand trades on its low corruption reputation and we are increasingly finding how to transfer these behaviours from our public to our private sector to leverage off this enviable reputation for integrity.
"Our public servants from throughout the country have a right to celebrate this news. The [index] proves that they are working to do a good job preventing corrupt behaviour."
Justice Minister Amy Adams said the 2016 result was "an excellent score" which New Zealanders could be proud of.
"While we've always done well in these rankings it's encouraging to see New Zealand reclaim the top spot - a placing we've held in eight of the last 10 years," she said.
She credited New Zealand's ranking to a series of Government initiatives. These included new bribery offences, ratification of the United Nations Convention Against Corruption, reviewing extradition laws and fast-tracking anti-money laundering reforms.
The ranking reflected New Zealand's "zero tolerance" of bribery and corruption and confirmed the country's reputation as a world leader in this area," Adams said.
New Zealand achieved the top ranking despite being caught up last year in the Panama Papers, which highlighted the holes in the country's foreign trusts regime.
The Government's response to the Panama Papers, the Shewan Inquiry, was criticised by Transparency International at the time. The organisation said it was "extremely surprised and disappointed" at the inquiry's limited scope.
New Zealand's dip in the rankings last year was blamed on the Saudi sheep deal, former Justice Minister Judith Collins's Oravida incident, and the Government's convention centre deal with Skycity which allowed more pokies to be installed at the casino.
Corruption Perceptions Index 2016
1 = Denmark
1 = New Zealand
3 Finland
4 Sweden
5 Switzerland
6 Norway
7 Singapore
8 Netherlands
9 Canada
10 = Germany
10 = Luxembourg
10 = United Kingdom