A former sex worker was made a dame in the Queen's Birthday honours list in New Zealand on Monday, in recognition of her services to the sex industry.

Catherine Healy was instrumental in bringing about New Zealand's 2003 decriminalising of sex work and the introduction of some of the most liberal prostitution laws in the world.

But the 62-year-old said she was surprised at the honour, which officially makes her a dame companion of the New Zealand Order of Merit.

"It's not something I would have expected," she told Radio New Zealand.

"In fact, I always say I expect to be arrested at dawn, not to have this kind of tremendous honour and I was just very affected, very touched."

Ms Healy has led the New Zealand Prostitutes Collective since 1989 and her honours citation said she had built it "into a globally respected public health provider".