Tuesday's case count is the first drop after five days of growth which culminated in Monday's record 981 cases.
Director-General of Health Ashley Bloomfield said New Zealand was experiencing a "two-speed outbreak" - with out-of-control growth in Auckland, and milder, yet still significant spread in the rest of the country.
Auckland reported 535 cases on Tuesday, with 209 elsewhere, headlined by 69 in the Waikato and 43 in Northland.
There are 40 people in hospital with the virus, and none in intensive care - numbers which public health experts warn will jump in coming days as more cases are reported.
However, New Zealand stands in good stead to avoid the worst of the Omicron outbreak due to late arrival of the variant which allowed more time for the vaccination rollout.
As of Tuesday, 95 per cent of eligible Kiwis are double-dosed, or 78 per cent of the entire country.
The booster campaign continues, with 61 per cent of eligible New Zealanders receiving a third dose, or 39 per cent of the entire country.
New Zealand's top epidemiologist, the University of Otago's Sir David Skegg, has appealed to Kiwis to get their booster.
"I'm amazed that there's more than a million New Zealanders who are eligible for a booster dose, who have not yet taken up that opportunity. This is crazy," he told Radio NZ.
"Two doses of the vaccine does not give adequate protection."
Sir David also warned New Zealanders the Omicron outbreak would hit the country in ways it is yet to experience during the pandemic.
"We all need to fasten our seatbelts," he said.
"The next few month are going to be very challenging for this country.
"It's not just health - although many of us will become sick and a considerable number of people will die - and it's also going to affect business ... social life ... education. The best we can do right now is for everyone to get boosted."
Sir David is one of a growing number of public health experts to advise the government to increase its definition of "fully vaccinated" from two doses to three.
Australia's top advisory group, ATAGI, did so last week, with states considering whether to adopt the new definition for their own settings.
Prime Minister Jacinda Ardern said New Zealand was considering that at the border.
"It reduces the likelihood of someone placing a burden on our health system," she said.
"More broadly, it's something we considered, we haven't made any changes to anything like vaccine passes."
The University of Otago professor disagreed with the PM.
"t's time we stop talking about people being fully vaccinated if they've only had two doses," he said.
"We know a lot more about the vaccines now and of course the virus has mutated Omicron ... two doses of the vaccine does not give adequate protection."
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