Corrections has apologised to 15 women and paid them $25,000 each in compensation after inmates faced intrusive "internal searches" when they were suspected of concealing contraband.
The illegal searches were carried out for a decade - and no contraband was found.
National Commissioner Rachel Leota said she apologised "unreservedly" to the women involved.
"I deeply regret that this practice was ever able to occur, and over such a long period of time."
Leota released the statement after Stuff made enquiries earlier this week.
Meanwhile, lawyers have been in touch with inmates and legal action against the government was now being considered.
The searches were "systemic" at Auckland Region Women's Corrections Facility between 2006 and 2016, Leota said in a statement.
"There was no evidence found of the practice being systemic at any other prison [but] two isolated confirmed incidents took place within a short period of time in 2016 at Arohata Prison," she added.
Corrections said it had contacted 18 women already and was working to contact another 14.
The 15 women who were compensated financially also "received an apology and access to counselling", Leota said.
Two women said they were not subject to a search and one was still in discussions about compensation, the department said.
The remaining 14 women Corrections was trying to trace were no longer in prison.
LAWSUITS LOOMING
Barristers Sue Gray and Emma Priest from Blackstone Chambers confirmed they had instructions from one woman to act for her.
Their client was "detained" with "her only way out being to agree to an invasive internal search", the barristers told Stuff.
"This search was clearly illegal, abhorrent and constitutes the offence of sexual violation under the Crimes Act."
The legal advice related to civil proceedings, for breaches of one woman's rights under the Bill of Rights.
"This prohibits torture or cruel and degrading treatment which clearly occurred," Gray and Priest said.
They said the offer from Corrections allowed for legal proceedings despite the existing compensation.
The woman instructing Gray and Priest had received $25,000 but was not barred from pursuing more action.
Gray and Priest said they were "available to assist others" Corrections had contacted during the investigation.
Corrections has admitted a variety of "outstanding legal matters" existed - including potential employment action against its own staff.
INTRUSIVE, ILLEGAL
Barrister Steve Keall said New Zealand was "out of date" when it came to working out how much money was appropriate in cases such as this.
He said a highly intrusive examination in somebody's genital area would likely result in more compensation than a less intrusive search.
Keall said the Corrections Act specified parameters in which X-ray, scanner, rub-down and strip searches were legal.
The law allowed for visual examination but banned "insertion of any instrument, device, or thing into any orifice" during a strip search.
Inmates searched at Auckland Region Women's jail were suspected of internally concealing contraband, Leota said.
The illegal searches happened under the watch of both Labour and National-led governments.
National Party corrections spokesman David Bennett said it appeared prison authorities had taken the issue "very seriously".
"It sounds like they're trying to make amends."
DOCTORS SACKED
One doctor who carried out searches was "partially suspended" in October 2016 and fully suspended six months later, Leota added.
Another doctor was fully suspended the same month.
But one doctor had taken legal proceedings against Corrections, Leota said.
Corrections said the doctor who conducted the two searches at Arohata Prison was no longer contracted to provide services to jails.
Leota said police and the Medical Council were alerted in 2017.
Medical officers who carried out the searches at Auckland Region Women's Corrections Facility had their services "terminated" in January 2018.
"The Inspectorate did not find any evidence of malicious or improper intention on the part of staff or the contracted doctors," Leota said.
A preliminary report found 34 women had been subjected to "suspected or confirmed" internal searches.
Evidence of substandard record-keeping was also uncovered.
An investigation found 42 suspected or confirmed searches happened.
Female doctors carried out 38 of these, a male doctor carried out three, and a Corrections nurse carried out one.
There was no evidence found of any "malicious or improper intention on the part of staff or the contracted doctors," Leota said.