Labour President Nigel Haworth has resigned over his handling of sexual assault allegations.
Haworth offered his resignation to Ardern after she read correspondence to the party confirming that the complaints were very serious.
Nigel Haworth has been Labour Party president since 2015.
Ardern made her displeasure with Haworth clear, saying "mistakes were made".
It follows reports by Stuff that a former Labour party volunteer says he raised these allegations with Haworth.
Haworth issued a statement on Tuesday claiming a 19-year-old woman did not tell him she was sexually assaulted by a Labour staffer, when they met in August 2018. He also said the accusation was also not provided to a panel established to investigate the man's conduct.
Prime Minister Jacinda Ardern has repeatedly said she was not told the allegations were of a sexual nature.
Stuff's story appeared to contradict that.
- 'Total disbelief': Labour Party volunteer alleges sexual assault
- Emails show Labour was sent details of sexual assault allegations against party staffer
- Former Labour party volunteer says he raised allegations with party president Nigel Haworth
- Jacinda Ardern: 'I never knew the complaints were of a sexual nature'
Haworth has held firm and maintained he acted professionally throughout the saga, disputing claims that he was told about sexual assault allegations.
Ardern said on Wednesday harm had been done and she was taking a victim-centred approach.
When asked if Haworth knew about the sexual assault allegations and had misled her, she said he maintained his position throughout and continued to do so.
The Party and Haworth maintained none of the complainants went directly to them claiming they had been sexually assaulted, she said.
Despite that, she believed the process the Labour Party deployed had done harm and was unacceptable.
There was no denial the Party had not learnt from the summer camp and mistakes had been made again, she said.
After the summer camp a process had been put in place but "actually the expertise does not exist," she said.
Despite the best intentions of the Party to put a process in place it thought was supporting victims, it was clear to her that it did harm, she said.
"It caused harm and that is not acceptable."
The issues brought to the party should have been dealt with externally, she said.
"It is clear to me that the party was never adequately equipped to deal with it. We just did not have the expertise, the experience. This is a deeply sensitive matter and it is clear from that [correspondence], harm has been done. It is my job to make that right."
She was now seeking advice on the alleged offender's employment .
When repeatedly asked if finance Minister Grant Robertson had told her about sexual assault allegations, she did not answer the question directly. She said those involved with the investigation maintained the same position and she was leaving it with the QC to look into.
Labour Party General Secretary Andre Anderson said the constitution did not provide for an acting president.
Until a new president could be elected at the party conference in November, senior vice presidents Tracey McLellan and Tane Phillips will have to step up, he said.
The PM and Haworth's official statements
Earlier Ardern issued a statement saying: "In the last 48 hours I have read incredibly distressing reports of an alleged sexual assault involving members of the Labour Party."
On Wednesday morning she was given some of the correspondence from complainants that had been written to the party several months ago.
It confirmed that the allegations made were extremely serious and that the process caused complainants additional distress, she said.
"And that ultimately, in my view, the party was never equipped to appropriately deal with the issue.
"I discussed the correspondence with the Labour Party President this morning. Whilst he stands by the statements he has made on this matter I believe mistakes were made."
Raising an allegation of sexual assault was an incredibly difficult thing to do and for additional distress to be caused through the way the allegations are handled is incredibly upsetting, she said.
"On behalf of the Labour Party I apologise to the complainants for the way this matter has been dealt with."
"I have made it clear that I want the QC led appeal process to resolve this matter. I also want to assure myself that appropriate victim support and advocacy have been put in place around the complainants and ensure the terms of reference in the appeal covers the entirety of the process.
She would be happy to meet with complainants and would take steps to make that offer available to them if they wish to take it up, she said.
"I want a justice system in New Zealand where people feel comfortable coming forward and are listened to, but I also need to ensure the Labour Party lives up to that expectation too," Ardern said.
In a statement Haworth said he would be resigning, effective immediately.
"I've come to the conclusion that regardless of the outcome of the appeal process into complaints about a Party member, fresh leadership will be required to take forward any recommendations from that process.
I have greatly enjoyed my time as president and will continue in my lifelong support of Labour and its principles."