Dreaver said Police were lovely and as far as she was aware she had not done anything wrong.
"I was under the impression and know we were allowed to talk to refugees. It shows things are a wee bit sensitive here, in fact a lot sensitive."
A Nauru government spokesperson said Dreaver was not detained by police but accompanied them voluntarily while they made further inquiries.
"No journalist on Nauru has been prevented from talking to any person, including refugees," they said.
Journalists on Nauru were required by the government to follow procedures set by the government, including on conducting stories outside of the Pacific Island Forum.
The spokesperson claims no restrictions were put in place on who they could or could not talk to on the island.
"However, this journalist did not follow procedures, and this potentially risked the safety and security of herself and others.
"We expect that some will attempt to portray this as Nauru preventing press freedom, however, this is not correct.
"Media from across the world are in Nauru and none have been restricted," the spokesperson said.
Foreign Minister Winston Peters said he heard from Mfat officials that she had been let go around 5pm.
Prime Minister Jacinda Ardern was alerted to Dreaver being detained by Peters earlier this afternoon and has spoken to officials about the situation.
"I am pleased Barbara Dreaver has been released from detention in Nauru."
"I was alerted to Barbara's situation by the Deputy Prime Minister this afternoon and in the intervening time I have spoken with my officials, including my foreign affairs advisor about this. Once in Nauru I will seek more advice about the situation."
Ardern will fly to the Micronesian island tomorrow to attend the Pacific Islands Forum.
National Party foreign affairs spokesman Todd McClay said Dreaver's detention had been unacceptable.
"Mr Peters must seek assurances from the Nauru Government that other members of the media will not be under threat of detention or interference.
"Freedom of the press is a fundamental part of any democracy and journalists must be free to tell important stories."
TVNZ's head of news and current affairs John Gillespie said Dreaver's media accreditation to cover the conference has been revoked since her release.
"After questioning her for nearly four hours, she was released," he said.
"Barbara's safe – we've spoken to her and she's in good spirits considering her ordeal."
Reports first suggested Dreaver was first detained after talking to refugees, World Vision said.
"World Vision New Zealand assisted TVNZ Correspondent Barbara Dreaver to connect with refugees on Nauru while she is there covering the Pacific Islands Forum," they said.
"We were contacted by our refugee liaison this afternoon, who let us know that Barbara's interview with a refugee had been stopped by the Nauru police, and Barbara was taken by them.
"We have had no contact with Barbara since then, but understand that Mfat is supporting her."
Gillespie said TVNZ isn't fully aware why she was detained and are working to put the pieces together.
"We don't have the full story. We're working with the Mfat to get information about what exactly went on here as a matter of urgency," he said.
The Ministry of Foreign Affairs said earlier that a Kiwi had been detained on Nauru but did not name them for privacy reasons.
An Mfat spokesperson said the "New Zealander and their family are receiving consular assistance".
Nauru's government has given limited media access to the forum and has allowed a small number of journalists to attend.
Earlier this year the Australian Broadcasting Corporation was banned from attending the event, which triggered a boycott by other Australian media.
"The fact she was stopped from doing her job raises major concerns about media freedom," Gillespie said.
World Vision New Zealand national director Grant Bayldon said the detention raised questions about hosting the forum in Nauru.
"Refugees have effectively been held against their will for five years in cruel conditions and in breach of international law," Bayldon said.
"If Pacific Island Forum leaders don't speak out on this issue it's hard to see what the forum itself stands for."
Dreaver was also banned from Fiji for eight years after a story she covered about poverty in a village aired in 2008.
Nauru is home to an Australian detention centre with more than nine hundred refugees and asylum seekers.
