"I'm not sure I'd describe it as a formal apology, it was more some context around the comments that were made," Mr Key said.
Mr Niiinisto was "extremely relaxed" about the incident.
"He would not see it as a diplomatic incident and was very understanding about the robustness of our Parliament and the type of debates that take place."
Mr Key said he had explained that Mr Shearer had held up Finland as an example for New Zealand to follow, and Mr Brownlee had "simply pointed out that there were a number of areas where New Zealand arguably had better statistics".
He said Mr Niinisto had joked that New Zealand used to be held up as an example for Finland to follow after economic reforms in the 1980s and it was amusing that the tables had now been turned.
"He said if we put the two together, a combination of Finland and New Zealand would be paradise."
Finnish comedian Tuomas Enbuske was among those to lash out at Mr Brownlee. In his television show he attacked the New Zealand MP over his weight, and mocked New Zealand for its sheep population.
Asked about Enbuske's comments, Mr Key said it was no secret that Mr Brownlee was "a large unit".
"I think everybody knows Gerry has a great sense of humour and he gives rollicking speeches in the House from time to time and that was one of them."
Mr Key said he had no plans to dispatch Mr Brownlee to Finland, as suggested by a Facebook page set up to protest against the comments, saying the minister had too much to do in Christchurch.
Earlier yesterday, Mr Brownlee apologised for any offence he had caused with the comments, and noted that he might have been incorrect in his comments about the country's education system.
"If I've offended people, I'm sorry about that. All I can say it was meant to be humorous and I apologise for people not seeing the humour in it."
Showing off his Nokia phone, Mr Brownlee said he carried "a little bit of Finland with me all the time".
"Wonderful country, very clever, we do like their mixed-ownership model and lots about them."
THE FINNS HIT BACK
- Tuomas Enbuske, comedian
"Hi there, Minister Gerry Brownlee. Due to the time difference, I'm not sure what time it is or when this message reaches you.
"I don't know if you're eating your third breakfast, or your fifth dinner right now, but looking at the pictures we've seen here in Finland, I'm pretty certain you're eating something.
"I want to respond to your comments about Finland because you are a significant person. By body mass index only, you measure up to three ordinary people....
"Finland has produced such inventions as the SMS message, the draining cupboard for dishes, xylitol chewing gum, and the wireless heart-rate monitor.
"New Zealand has invented the game for white men called swindle the land from the Maori ...
"We have Kimi Raikkonen [F1 driver] ... you have sheep.
"We have Linus Torvalds [creator of Linux computer software] ... you have sheep.
"We have the Angry Birds game ... you have sheep.
"We have Alvar Aalto [architect] ... you have sheep.
"We have Nokia ... you have sheep.
"We have Martti Ahtisaari [Nobel winner] ... you have sheep.
"Thank you. Greetings from Finland."