But the Government confirmed this afternoon it would table a similar amendment which clarified that a ban would not affect pharmaceutical products.
Primary Industries Minister Nathan Guy said the Government was concerned that Ms Mathers' amendment may have been too broad.
"This could lead to unintended consequences such as banning testing on ingredients in medicines that New Zealanders depend on," he said.
Mr Guy thanked Ms Mathers for her work on the issue.
"Although the Government has introduced slightly alternative wording, this amendment still captures the principle of her SOP."
He added: "It's important to note we already have a strong framework for any animal testing done in New Zealand. Any testing for products like medicines has to be approved by an independent ethics committee and has to show the benefits will outweigh any harm caused."
Ms Mathers said she was "over the moon" that the Government had introduced a ban and acknowledged her work on the issue.
"I have been working solidly behind the scenes to get this ban through Parliament for some time now," she said.
"It's fantastic that we will now be able to hold our head up high as a country and say that we too have banned this cruel and outdated practice."
The issue of animal testing gained significant traction during the debate on legalising synthetic drugs last year.
After significant public opposition, Parliament voted to ban legal high manufacturers from testing party pills or synthetic marijuana on animals to prove they were "low-risk".
The extent of testing cosmetics on animals in New Zealand was not known because companies were not required to put this information on their labels.
The practice was believed to be rare or non-existent because it was likely to fall below a benefit-harm threshold.
But the Greens wanted a ban to be written into legislation.
About 90 per cent of the cosmetics sold in New Zealand are imported, and animal rights activists are also seeking a ban on imports which used animal testing.
It is already illegal in New Zealand for manufacturers to test their finished products on animals.