The new Omicron subvariant dubbed "Kraken" has been detected in New Zealand for the first time according to the Ministry of Health.

"The Institute of Environmental Science and Research (ESR) reported the whole genome sequencing results for two Covid-19 cases with XBB.1.5 late last week," the ministry said in a statement this afternoon.

The World Health Organization's (WHO) senior epidemiologist Maria Van Kerkhove last week said XBB.1.5 is the most transmissible Omicron sub-variant detected so far.

It spreads rapidly because of the mutations it contains, allowing it to adhere to cells and replicate easily.

The subvariant is fast becoming dominant in the US, leading to a rise in hospitalisations of worst affected areas, according to leading epidemiologist Dr Eric Feigl Ding.

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"The detection of XBB.1.5 is not unexpected, following its recent detection in Australia and globally, and our Covid-19 response accounts for the emergence of new variants," the ministry said.

"So far, most Omicron variants have not demonstrated a change in severity of the disease, and there is no evidence at this stage to indicate XBB.1.5 causes more severe disease compared to other variants."

It comes as there were 21,685 new Covid-19 cases reported in New Zealand over the past week.

It continues a trend of falling case numbers over the last two weeks, however its unclear how the holiday period has affected people logging their positive tests online.

The Ministry of Health said it "remains unknown" how the Kraken subvariant will compete against other Covid variants in New Zealand.

"Relative to many other parts of the world, New Zealand currently has a high level of immunity based on high vaccine uptake, combined with a recent wave of infections (so-called ‘hybrid immunity’).

Vaccines are still expected to provide protection against severe disease from XBB.1.5, particularly in those who have received boosters. We encourage people to get their vaccine and booster doses when they fall due," the ministry said.