Nationals Nathan Guy says it's a huge blow for the regions that face an uncertain future as the government continues to raid the regions.
"This summer alone saw six regions declared in drought as dry weather hammered primary producers right around New Zealand. These irrigation projects would have given them the certainty they could deal with future dry spells but that certainty’s now been ripped away"
The government said large-scale irrigation schemes should be economically viable on their own.
Finance Minister Grant Robertson said: "We must be mindful of the potential for large-scale irrigation to lead to intensive farming practices which may contribute to adverse environmental outcomes".
Meanwhile, the Greens say the winding down of big irrigation systems will mark a significant step towards cleaner rivers and less climate pollution.
"Many of these industrial-scale irrigation schemes weren’t economically viable without taxpayer subsidies and led directly to over-intensive dairy conversions and increases in water pollution and greenhouse gas emissions," Green's leader James Shaw said.