The country's biggest dairy producer Fonterra has reported that tests have found a strain of bacteria in batches of whey protein that can cause botulism.
New Zealand's Ministry of Primary Industries has confirmed the tainted products include infant formula, sports and protein drinks and other beverages.
The government said the contaminated whey protein concentrate, or products using this ingredient, had been exported to Australia, China, Malaysia, Saudi Arabia, Thailand and Vietnam.
- Strain of bacteria that can cause botulism found in some Fonterra products
- Products had been exported to Australia, China, Malaysia, Saudi Arabia, Thailand and Vietnam
- The affected product was used in a range of drinks including infant formula and sports drinks
- Dairy exports are New Zealand's major earner and its products are particularly popular in Asia
Potentially fatal botulism is one of the most dangerous forms of food poisoning, often leading to paralysis.
The ministry's acting director-general, Scott Gallacher, says the government is trying to clarify the full extent of the problem.
"Over the last 24 hours, things have been very fluid," he said.
"Information has been changing on a rapid basis as we try to get to grips with exactly the situation and scenario that we're dealing with."
Fonterra, which manufactured the product more than a year ago, said eight customers had been advised and were investigating whether any of the affected product was in their supply chains.
There have been no reports of any illness linked to consumption of the affected whey protein.
New Zealand trade minister Tim Groser said health authorities around the world, including the World Health Organisation, had also been alerted to the contamination.
"As soon as New Zealand authorities were notified of this risk, we immediately acted to inform relevant authorities around the world," Mr Groser said.
"This has included formally notifying Infosan, the World Health Organisation's international food safety regulators network. As more information on this issue is confirmed we will provide our trading partners with further updates.
"We understand that the markets to which contaminated whey protein concentrate, or products using this ingredient, has been exported are Australia, China, Malaysia, Saudi Arabia, Thailand and Vietnam."
Sports drinks, baby formula in botulism scare
Fonterra said the affected product was used in a range of drinks including infant formula and sports drinks.
"We are doing everything we can to assist our customers in ensuring any product containing this ingredient is removed from the marketplace and that the public is made aware," Fonterra chief executive Theo Spierings said.
Three batches of whey protein concentrate manufactured in May last year recently tested positive for Clostridium botulinum.
The batches have been used to form 870 tonnes of products sold in a variety of markets, Mr Gallacher said.
The symptoms of botulism include nausea, vomiting and diarrhoea, followed by paralysis, and it can be fatal if not treated.
Fonterra said the potential impact on someone consuming a contaminated product would depend on their age and the amount they consumed.
For an adult, a small amount of contaminated whey protein "would probably pass through unnoticed", Fonterra's managing director of New Zealand milk products, Gary Romano, told reporters.
Dairy exports are New Zealand's major earner and its products are particularly popular in Asia, where they are considered the gold standard.
According to government data the dairy industry contributes 2.8 per cent to New Zealand's GDP and about 25 per cent of its exports. It is worth NZ$10.4 billion (US$8.5 billion) annually.
New Zealand accounts for one-third of the world's cross-border trade in dairy products.
Fonterra, the world's largest dairy exporter, reported revenues of NZ$19.8 billion in the 2012 financial year.