Anyone who is not back home by Friday will have to go into managed isolation.
Ardern said ministers had been keeping a daily watch over what was happening in Australia and was concerned by not only the outbreak in New South Wales but the ability to contain an outbreak within a state border.
"For us this was about shutting down the risk entirely."
The Prime Minister cut her holiday short on Friday to announce the travel bubble would be on hold for at least eight weeks as Australia grappled with a growing number of Covid cases.
Ardern acknowledged the "devastating" impact the Australian Covid outbreak was having on people's lives and said she would not risk the hard work put in by the team of 5 million by keeping the bubble open when the risk was high from the Delta variant.
The Delta variant had materially changed the risk profile for the transtasman bubble, she said.
Meanwhile, there were no new cases of Covid-19 in the community and two in MIQ in New Zealand yesterday.
There were also two new historical cases on board the Spanish fishing vessel Playa Zahara. It means the number of active cases in New Zealand is now 58.
One person who travelled to New Zealand directly from the United States tested positive on day 12 of their 14-day stay in MIQ. The second positive case in MIQ travelled from the UK via the United Arab Emirates.
The update comes as the ministry scrambles to determine whether two positive wastewater results this week in Taranaki mean there are undetected cases in the community.
People in the region are being urged to get tested, as well as anyone who has recently visited the area and who has symptoms.
The ministry is recommending anyone who has recently been in Australia who is now in Taranaki to get tested - even if they don't have symptoms.
Meanwhile, the country's vaccine rollout is starting to ramp up and everyone aged 65 or over should have received their invite by now and if they hadn't there was a dedicate phone number available for them to call and book.
"We have been hitting 30,000-plus days in terms of the number of doses going out."
Ardern said although not all of group three - vulnerable people and those over 65 had had their vaccines - invites were being sent to other groups because the programme was ramping up and more centres were opening to meet the demand.