Thousands of Māori took to the streets in 2019 in protest after media reports that the children's ministry tried to take a newborn baby away from her mother in hospital.
Children's Minister Kelvin Davis said on Wednesday the government has accepted all recommendations of a ministerial advisory board on how to fix the child care and protection system.
The ministry had been told that removing children should be done only as a last resort.
"This report will end uplifts as we have known them," Mr Davis said in a statement, adding that future efforts would focus on community-led prevention.
In 2019-2020, 1,334 children entered state care, according to documents on the ministry's website, of which about 60 per cent were Māori.
Māori have called children taken into state care New Zealand's "Stolen Generation" - a reference to Indigenous Australians forcibly taken from their families as children under an official policy of assimilation.
Prime Minister Jacinda Ardern, seen as a global figure on issues of woman's rights and social justice, launched a Royal Commission of Inquiry in 2018 into the abuse of young people in state care, saying the country needed to confront "a dark chapter" in its history.
The inquiry revealed in December that up to a quarter of a million children, young people and vulnerable adults were physically and sexually abused in faith-based and state care institutions from the 1960s to the early 2000s.
Readers seeking support can contact Lifeline crisis support on 13 11 14, Suicide Call Back Service on 1300 659 467 and Kids Helpline on 1800 55 1800 (for young people aged 5 to 25). More information is available at Beyond Blue.org.au and lifeline.org.au.
Anyone seeking information or support relating to sexual abuse can contact Bravehearts on 1800 272 831 or Blue Knot on 1300 657 380.