Dr Smith said it was that kind of waste that would be targeted under the proposal, which was out for public consultation until December.
Seafood New Zealand chief executive Tim Pankhurst said the result of the proposal would be that instead of taking sharks' fins from the dead animals, "the whole carcase just gets heaved back into the sea if it comes aboard dead".
"No shark is targeted for their fins alone and in the tuna fishery where blue sharks are a significant bycatch the focus needs to be on reducing that catch."
Fishing company Sealord said the plan did not affect it, as it had a "non shark finning" policy for the last 18 months.
The New Zealand Shark Alliance (NZSA) said the proposal was good news for sharks and New Zealand's environmental reputation.
"We strongly support today's announcement and will be encouraging the Government to implement the ban quickly, especially in the highly migratory species fishery which is New Zealand's main shark finning fishery," Katrina Subedar, NZSA spokeswoman and Forest & Bird Marine Conservation advocate said.
"Once this becomes law New Zealand will join over 100 other countries and states to have banned this senseless and wasteful practice."
Greenpeace New Zealand oceans campaigner Karli Thomas said there was huge support from New Zealanders for a ban on shark finning.
"This year tens of thousands of people have pledged their support for a ban. Now we're urging them to go online and support the Government's proposal."
The proposal also gained cross party support, but Labour and the Greens said it should have happened sooner.
Labour's fisheries spokesman Damien O'Connor said New Zealand had been "tardy" in proposing the plan and followed countries such as Australia, the United States and the European Union.
"In New Zealand, conservation groups estimate 24,000 tonnes of sharks are caught in our waters. Most of the world's sharks that are caught are thrown back with only 2 per cent of the shark being used."
Green Party oceans spokesman Gareth Hughes said he was "delighted" the Government had finally acknowledged the activity could not be allowed to continue.
"The Greens have been calling for a ban on shark finning for over five years, and it is great that the Government has finally woken up to the importance of this issue."
Mr Guy said in some fisheries the ban will be able to be implemented on October 1 next year. Others would require the development of guidelines for shark handling to maximise the survival of released sharks.
The ban on shark finning would be enforced by extra observers and cameras on commercial fleets as well as proposed a $100,000 fine for those breaking the ban.
"I think that's a very strong signal from Government that we expect the industry to change," Dr Smith said.
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Sharks in New Zealand:
* New Zealand waters have 113 species of shark;
* more than 70 shark species have been recorded in commercial fisheries;
* seven species of shark are absolutely protected under the Wildlife Act 1953, including great whites, basking sharks and deep water nursing sharks;
* shark fins are valuable for making shark fin soup, which is a delicacy in Asia, and for the production of many Asian medicines.
