The majority of affected vehicles (45,622) are used imported vehicles.
Vehicle owners will not have to pay for any repairs; that cost will be borne by distributors.
The Takata airbags have been the subject of a voluntary recall in New Zealand since 2013 but Commerce and Consumer Affairs Minister Kris Faafoi, who announced the compulsory recall today, said progress to repair the vehicles had not been fast enough.
"The motor vehicle industry has recalled vehicles with the Takata airbags with varying degrees of success but more must be done to ensure that the highest risk Alpha-type airbags are removed from our vehicle fleet," he said.
"While New Zealand has not had any fatal or serious incidents related to Takata airbag failures, the risks are too great not to intervene," he said.
The airbags have been associated with 23 deaths, one in Australia, and more than 230 serious injuries worldwide since 2008.
Takata's later model non-Alpha airbags are also subject to a recall in New Zealand. The recall of 257,000 vehicles is not compulsory but Faafoi warned it would be if people didn't act fast enough to take the vehicles in for repair.
The total number of vehicles affected by both recalls in New Zealand is more than 450,000, and 100 million globally.
It is only the second compulsory recall in New Zealand history, and the largest vehicle recall by far.
Vehicle owners can find out whether their cars are affected on the Ministry of Business, Innovation and Enterprise's recalls.govt.nz website. A dedicated website detailing all affected cars will be running within days.
Faafoi has set up a monitoring group to ensure non-Alpha airbag recalls are progressing.
He is also halting the further importation of vehicles with affected airbags.
That will affect around 5000 to 7000 used vehicle imports each month.
After a 40 working-day grace period, no new or used affected vehicles will be allowed into the country.
The Motor Industry Association (MIA), which represents new vehicle importers, and the Vehicle Industry Association, which represents used vehicle importers, are working on a Memorandum of Understanding to ensure the repair work is properly resourced and completed for vehicle owners as soon as possible.
MIA chief executive David Crawford said his organisation had feared the voluntary recall was not progressing fast enough.
"I didn't then want to have to then face New Zealand and say yes we've known about this for a long time, somebody's died because we couldn't get [the part] replaced. Our concern is consumer protection."
Crawford said the problem had been exacerbated by importers of used vehicles who had continued to bring them in without checking they had been fixed and sold them to unsuspecting New Zealanders.
"They're not compliant vehicles and they should never have passed compliance into New Zealand."
Consumer NZ head of testing Paul Smith said the issue had flown under the radar of a lot of vehicle owners.
"The message for consumers is, yes it's the responsibility of the industry to fix this it, there's also a responsibility on consumers there to be part of it, engage with it."
Australia issued a compulsory recall in late February, covering about four million vehicles.
At the time, Faafoi ordered an urgent report into the issue here. The New Zealand Transport Agency said at the time it would not follow Australia's lead because there had been no reported incidents related to the faulty airbags in New Zealand, and the voluntary recall was satisfactory.
What is the issue?
Airbags manufactured by the Japanese Takata company are potentially defective.
The gas inside the airbag inflator can be affected by moisture which can cause it to deploy with explosive force, sending metal shards from the canister flying into the passenger cabin.
The risk of failure is higher in hot and humid conditions.
Not all Takata airbags will explode on deployment – about one in 400 risk.
Tests on older Alpha-type airbags show up to half could explode on deployment.
Who's affected
Compulsory recall of 50,417 vehicles of various models fitted with Takata Alpha-type airbags
Voluntary recall of 256,986 vehicles of various models fitted with Takata non Alpha-type airbags
What should you do?
Check to see if your vehicle has been recalled. You can look for NZ-new models here www.recalls.govt.nz/airbags or find a list of used-import models recalled in Japan here www.rightcar.govt.nz/airbagrecall. The lists are always being updated, as more makes and models are implicated, so keep checking.
If your car is on the recall list, the manufacturer will contact you by letter. Make sure your address is up to date here transact.nzta.govt.nz/transactions/ChangeOfAddress/entry
If you haven't been contacted, or you are concerned your car is part of the recall, contact the local dealer for the brand of your car (if it was sold NZ-new) or the importer (if it was a used-import) for advice.
If you are contacted by the manufacturer or importer, take your car in and get it fixed. It won't cost you anything.
Source: Consumer NZ