However, no studies had been done to quantify the cancer risk from exposure to lindane in scabies and head lice treatments or from residues in food, the agency's head, Dr Kurt Straif, told British media.
New Zealand's Health Ministry and Environmental Protection Authority (EPA) said they would review the agency's full data, yet to be published, but the ministry said there was already a plan to withdraw Benhex in August.
This was when an exemption permitting lindane to be used to treat scabies and head lice expired, said the acting director of public health, Dr Stewart Jessamine.
Lindane's use as an agricultural pesticide was banned in 2009 under the international Stockholm Convention, ratified by New Zealand in 2004, but its human pharmaceutical use was given a six-year extension.
Dr Jessamine said lindane was still widely used in the tropics, the US and Europe for scabies and head lice.
Benhex, which can be bought from pharmacies, is supplied by API Consumer Brands and is state-subsidised by Pharmac.
One Auckland pharmacy said it sells a couple of tubes of Benhex a month. Other pharmacies said they did not have any; several NZ online pharmacies offer it for sale.
API general manager Mitch Cuevas said he was not aware of the cancer agency report.
"We have stopped manufacturing it completely. There's still some product in the market which is going to be sold through but we will be making no more of it, based on a number of factors around the safety of the ingredients ... not so much the carcinogenicity of it. It is a dangerous substance and not just in Benhex cream but also handling of the substance in manufacturing."
Dermatologist Dr Amanda Oakley, an honorary associate professor at Auckland University in the Waikato, said alternative treatments were already available.
"The concern I have read previously about [lindane] is its neuro-toxicity. Dermatologists have not been terribly keen on using that product for many years because of that concern, and also that the bugs were getting resistant to it."
Dr Jessamine said there was no urgency for people to dispose of old tubes of Benhex because the risk of occasional applications to the skin causing cancer was very low.