Minister of Defence Ron Mark has confirmed that training activities at Iraq's Camp Taji are being halted.
Overnight the Iraqi parliament passed a non-binding resolution calling for all foreign troops to leave, after Iran's most prominent general, Qassem Soleimani, was killed on Friday in a US drone strike on his convoy at Baghdad airport under President Donald Trump's orders.
Trump and his advisers have been defending the US drone strike on Soleimani, whose death has escalated tensions in the region.
New Zealand has up to 45 military personnel in a non-combat training role at Taji Military Complex in Iraq and five personnel in Baghdad. The government had already planned to withdraw all troops by June this year.
The New Zealand Defence Force says reports that it is preparing a C130 Hercules to evacuate 45 defence force personnel from Camp Taji are untrue.
A defence force spokesperson said it was not actively preparing to evacuate its personnel in the region.
They say any decision to evacuate personnel will be made by the government.
However, the Defence Minister said training activities were on hold, as the focus turned to the protection of its defence force members.
He said the government, along with its coalition partners, was closely monitoring the situation and the defence force remained vigilant to any changes in the security environment.
On the other hand, Trump issued a threat to Baghdad after the Iraqi parliament's resolution, saying the US would impose sanctions if its troops were forced to leave.
"We have a very extraordinarily expensive air base that's there. It cost billions of dollars to build, long before my time. We're not leaving unless they pay us back for it," Trump told reporters.
Trump said that if Iraq asked US forces to leave and it was not done on a friendly basis, "we will charge them sanctions like they've never seen before ever. It'll make Iranian sanctions look somewhat tame."
Some 5000 US soldiers are in Iraq as part of the international coalition against the Islamic State (IS) group.
-With additional reporting from Reuters