The government's new welfare code for chickens still allows them to be kept in cruel cages, the Green Party says.
Primary Industry Minister David Carter announced on Thursday battery cages will be phased out and banned from 2022.
From Friday, no new battery cages can be installed by egg producers.
"Scientific evidence and strong public opinion have made it clear that change is necessary," he said.
A new code of conduct will allow hens to be kept in colony cages - a larger cage - or in barns.
The Green's animal welfare spokeswoman, Mojo Mathers, says all types of cages should have been banned.
"Colony cages don't meet the fundamental purpose of the Animal Welfare Act," she said.
"The minister is entrenching the use of loopholes to allow factory farms to continue to keep animals in cruel conditions."
Mr Carter says more than 80 per cent of New Zealand eggs are laid in battery cages, so the change will be "a major shift" for producers.
Under the new code, about 45 per cent of battery cages will be gone by 2018.
"An immediate prohibition of battery cages would have an unacceptable impact on egg prices, industry structure and the stability of egg supply," Mr Carter said.