Mahuta, who has an indigenous Maori facial tattoo, replaces populist Winston Peters, whose New Zealand First party flunked in the 5-million nation's October 17 election.
Ardern appointed Grant Robertson as her new deputy premier, making him the first openly gay person to hold the position. Robertson, a chief strategist in Ardern's election campaign, will also remain New Zealand's finance minister.
Ardern's new 20-member cabinet is comprised of five Maori, three LGBT+ members and two with Pacific island links.
Previous deputy premier Kelvin Davis, renowned for citing limericks, has become children's minister under Ardern's pledge to lift thousands of children out of poverty.
Despite her center-left Labour Party winning an absolute majority under a proportional voting system akin to Germany, Ardern on Monday included two Greens lawmakers to ministries but outside her cabinet.
Under a "cooperation agreement," Greens co-leader James Shaw remains climate change minister, and co-leader Marama Davidson will deal with preventing family and sexual violence — topics often in New Zealand's domestic news.
Cabinet members 'represent renewal'
Ardern, just 40 years old, and acclaimed worldwide for her handling in the aftermath of the 2019 Christchurch mosque massacre, described her line-up as "incredibly diverse" and vowed to pursue economic recovery.
"My focus was just [choosing] the best person for the job," said Ardern. "They also represent renewal."
Identifiers such as homosexuality were "secondary" in New Zealand, where what counted was leadership ability and "merit," she added.
Robertson said young LGBT+ (lesbian, gay, bisexual, transgender) people looked to his role-modelling and vowed to run his finance portfolio "the way I've been doing it."
The new minister of youth and diversity is Priyanca Radhakrishnan, a Singapore-educated social worker, who was born in India.
Also in the cabinet are ministers with Pacific island links, including Carmel Sepuloni of Tongan island descent, who remains social development minister.
'Lifting the ceiling,' says Mahuta
Mahuta, who has a traditional female Maori tattoo on her chin known as a moko kauae, said her appointment was "huge privilege."
"I hope than many other women of Maori descent, mixed descent, across New Zealand will see this as lifting the ceiling once again on areas that have been very much closed to us in terms of professional opportunities," Mahuta said.
She is the first woman to serve in the role as foreign minister in a country that was the first to give women the right to vote in 1893.
Arden said Mahuta built relationships "very, very quickly," a key attribute in managing ties within the vast region around New Zealand, including Australia and scattered Pacific islands.
Special COVID role for health minister
Previous Health Minister Chris Hipkins will take on a special role as minister for New Zealand's COVID-19 response, allowing him to focus on border control and isolation, while retaining his education portfolio.
New Zealand, still drawing on its post-war 1918 Spanish Flu expertise, has kept the COVID-19 pandemic down to 25 deaths since February and lifted lockdowns, astounding many other developed countries.
The health portfolio switches to trade union-affiliate and former justice minister Andrew Little, who retains oversight of New Zealand's intelligence agencies.
Parliamentary newcomer Ayesha Verrall, a public health doctor, will now take over as minister for aged care and food safety. Her mother originated from the Maldives.