New figures given exclusively to TVNZ1's Breakfast show 82 per cent of Year 10 students have never tried cigarettes.
Former Prime Minister Helen Clark, also patron for Action on Smoking and Health (ASH), told Breakfast the figures are "really fantastic".
The 2017 figures shows the students had an all time low daily smoking rate of 2.1 per cent, with Maori students sitting at 5.3 per cent.
These figures are the lowest since ASH begun the survey in 1992. In 1999, daily smoking rates for Year 10s was 15.6 per cent and Maori students was at 30.2 per cent.
"We are looking at the real possibility now of a smoke free generation, and hopefully that then carries on very strongly into the adult years."
Ms Clark said New Zealand still has a rate of daily smoking of over 15 per cent.
On Breakfast she recalled bringing in the original smokefree environments Act saying :"It was very controversial".
Steep taxes on tobacco which "had to happen", and "huge advances" in altering packaging and displays of cigarettes, publicity campaigns aimed at young people have all contributed to the drop in smoking, Ms Clark said.
She says remaining inequalities in health, with a higher percentage of Maori smoking, meant work still needed to be done.
Breakfast host Jack Tame asked Ms Clark about claims that heavy taxation contributes to the high spate in violent dairy robberies from a tobacco black market, to which Ms Clark said: "As we make progress with this smokefree generation, which is just so close, these sorts of issues you just raised are going to drop away".
"Clearly there are a whole lot of issues behind the violent and horrible robbings of dairies... but is this the major element? Personally I'd be doubtful."