As a parting gift Macfarlane left a small korowai to be presented to the winner of the principal's award each year.
MacFarlane told the Rotorua Daily Post she was struggling with the fact she was leaving.
"I'm going to miss this place. It will be forever in my heart."
She said everything in the job was a challenge but it was rewarding seeing novice teachers grow from novice, to great, to expert.
"It's satisfying to know you had a part in that," she said.
"The school has grown significantly in the time I've been here. Sometimes it's hard to keep up."
Deputy principal Sarah Thompson said Macfarlane had been a good principal because she always made people feel welcome and cared for.
"Her priority is always the progress and achievement of the students and ensuring that this remains paramount," Thompson said.
"Her leadership of the Kahui Ako (community of learning) has resulted in the eight schools ... developing a positive sense of community and making a real difference for learners in this community.
"The major lasting impact she will have at Glenholme School will be the impact on student progress and achievement and the building of positive relationships within the school and community."
Junior school teacher Lynda Williamson described MacFarlane as "cheerful and enthusiastic".
"Nancy has a caring approach to the school community. She wants the very best for Glenholme students. She has had consistently high expectations and a clear vision for the school."
Iain Picken, who has taught at Glenholme School for 13 years, echoed Williamson.
"She has extremely high standards and expectations of the teachers and their teaching programme."