In 2022, the governments agreed a deal for 450 people in Australian offshore detention centres to settle in New Zealand, following certification as refugees.
However, with a new government in office in Wellington, there appears to be little appetite to continue the arrangement past its expiry in June 2025.
The deal's end could mean refugees in Australia's offshore processing have one fewer avenue for resettlement, concerning advocates.
Two years into the three-year agreement, the UN Refugee Agency has referred 385 refugees for consideration, with 210 approved and 172 settled in New Zealand.
The low take-up, according to figures from NZ Immigration, means New Zealand is extremely unlikely to reach the deal's intended quota.
Casey Costello, NZ's associate immigration minister with responsibility for refugees, said she was not of a mind to seek an extension.
"I'm really concerned about where we're investing our resources in this program," she told AAP.
"If we're trying to resettle people that don't want to resettle here, then are we better look at our resources being committed elsewhere?
"We'll just continue to review it and while there's still people who are willing to come - there's still people in the pipeline - we'll keep working."
NZ's refugees minister Casey Costello meets Nauruan President David Adeang on a recent visit. (Ben McKay/AAP PHOTOS)
Privately, officials admit NZ won't hit 450 refugees.
"We may not reach it," Ms Costello said.
A final decision on the future of the deal will be taken after cabinet discussions and "government-to-government" talks, she said.
It is not clear whether it will be a subject of discussion this week, when Chris Luxon visits Anthony Albanese in Canberra for the annual Australia New Zealand Leaders Meeting.
Advocates say the key challenge to resettle refugees is not a lack of will to go to New Zealand.
"The barrier right now is the length of time it's taking for the resettlement process to occur," Asylum Seeker Resource Centre spokeswoman Jana Favero said.
"We have heard first-hand from refugees in Papua New Guinea and Australia, who want to be resettled in New Zealand, that the process is long-winded and confusing and involves multiple interviews.
"Some people have been waiting in the NZ process since May 2022 to be resettled and they're anxious this will not be resolved (before) the New Zealand deal is set to expire."
According to the ASRC, some have been interviewed more than a dozen times.
The ASRC has documented alarming health issues among refugees in Papua New Guinea and Nauru, including 88 per cent of those in PNG suffering "severe mental health conditions" and 40 per cent "chronic suicidal ideation and a history of suicide attempts".
Behrouz Boochani, the most high-profile person to settle in NZ after Australian offshore detention. (Martin Hunter/AAP PHOTOS)
Fiona Whiteridge at NZ Immigration said assessments took between "six to 12 months on average depending on the complexity of the case" and that PNG cases were "within this timeframe".
Ms Whiteridge said the vast majority of refugees resettled under the deal were "Iranian, some Sri Lankan and very small numbers of Sudanese; Afghan; Rohingya and Iraqi".
The likely end of the deal leaves question marks as to whether those in Australian offshore detention will have New Zealand as an option for resettlement through its broader Refugee Quota Programme.
New Zealand has taken 54 refugees from Manus Island through the broader quota, with a smaller number understood still in the queue.
Ms Costello said that quota, expanded to an annual intake of 1500 by the previous government, would remain with "no consideration" to dropping numbers.
"I think that's working really well," she said.
The government is also trialling a community sponsorship companion pathway, which Ms Costello said had allowed an additional 50 places.
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