An independent review has found long-term detention is "wrong at every level", concluding it's "inhumane" and "contrary to New Zealand values" and that the current rate of detention is not justifiable on any basis.
Under current law, asylum seekers can be held in prison if they arrive on false documents, are deemed a security risk or make a claim while illegally here.
Bernard Sama found safety in New Zealand after fleeing persecution in Cameroon and now supports others trying to do the same.
He said the report was "damning".
"Ultimately this practice should stop. It's cruel and inhumane, there are better ways it could be done," Sama said.
Greens MP Golriz Ghahraman said the report revealed a "culture of prejudice against asylum seekers at Immigration New Zealand", describing it as "heartbreaking".
Between 2015 and 2020 about 100 asylum seekers were locked up out of 2500 who made claims.
One spent three years inside while his claim was processed, the longest ever for an asylum seeker.
"It was the worst time of my life," the man told 1News.
Many agree jail isn't the answer.
"Keeping people who seek asylum, it's not a crime, these people committed no crime, they are innocent people," writer and political refugee Behrouz Boochani said.
The report calls for a law change. It says long-term detention has to stop and any detention should be a last resort and with a time limit.
The Government is now promising to stop imprisoning asylum seekers while their claims are processed.
"New Zealand is better than this, we want to do the right thing by people who are fleeing persecution and seeking refuge in our country," Associate Minister for the Environment and Immigration Phil Twyford said.