"This is fulfilling our obligations. We already have a commitment to a current training program that extends to the middle of 2019 ... We serve alongside Australian forces. If we were to withdraw now that would be seen as not completing the commitment," Ardern said.
She denied the news was "mission creep".
"But we're also signalling that we're anticipating New Zealand's contribution changing in the future," she added.
The left-wing Green Party - a coalition partner to New Zealand's ruling Labour Party led by Ardern - opposes the extension.
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Ardern also said that starting November New Zealand's Iraq contingent will drop to 121 personnel.
The country's Iraq training mission began in 2015 and had been extended by the previous government.
More than 30,000 Iraqi troops have been trained by New Zealander and Australian troops to fight in the US-led coalition against the Islamic State.Iraq's Prime Minister Haidar al-Abadi declared victory over Islamic State jihadists in December 2017, prompting Western allies to re-evaluate the mission.
Meanwhile, New Zealand's 11 military trainers in Afghanistan will continue their mission until September 2019. The government will also review its Afghanistan mission next year.
Agencies contributed to this report.
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