Hundreds turned out to witness the occasion, with Beehive staff and members of the public looking on from fenced off areas.

In her speech, Dame Patsy said she hoped her long career in the public and private sectors as well as in arts and culture would "help determine a pathway by which I hope to make a lasting contribution".

She says her tenure will include four main themes - creativity, innovation, leadership and diversity.

"I believe that they will be key drivers of a strong, successful and vibrant country in the years ahead."

Prime Minister John Key says New Zealand is seen as a country with a strong history of gender equality.

"Dame Patsy's appointment sends a strong message about New Zealand valuing women in leadership roles," he says.

Well first let's take a walk down memory lane - into the distant history.

Captain William Hobson - the man who drafted the Treaty of Waitangi - was the first to be appointed to the role that's now called Governor-General back in 1841.

He was the Queen's Representative and Commander in Chief of New Zealand.

That definition hasn't changed all that much, Dame Patsy will also hold the full title 'Governor-General and Commander in Chief of the Realm of New Zealand'.

But since Hobson's time in office, a lot of the powers that came with the office have been diminished.

It's now largely viewed as a ceremonial role, with the Governor-General holding functions like officially swearing in new Prime Ministers, summoning and dissolving Parliaments, and hosting heads of state when they visit.

But there are some powers that still exist - even if they are never exercised.

Every law that passes through New Zealand Parliament must then be granted Royal Assent. That's given by the Governor-General on behalf of the Queen - but the Governor-General also essentially holds the power of veto over this - meaning they can withhold Royal Assent and it would never become law.

Usually nowadays, Parliament is dissolved on the Prime Minister's advice when it's time for an election. But the Governor-General actually has the reserve power to dissolve a parliament without the Prime Minister calling an election, and the right to refuse to dissolve the Parliament if the Prime Minister calls for it.

The Governor-General's also responsible for appointing and dismissing Cabinet ministers, on the advice of the Prime Minister. But if Dame Patsy really wanted to stretch her powers, she could actually do this without the Prime Minister's approval - or even sack the Prime Minister.

While none of those powers will likely be exercised, it could be taken as a huge burden of responsibility.

So what's that worth? Well, during her time in the role Dame Patsy will be banking $348,000 a year, plus an allowance of $31,081 per year.

And once she finishes up she'll be paid $15,000 for every year she served as Governor-General.

Newshub.