Archives New Zealand says it has enough space for now, but is looking at future physical and digital storage requirements.
It is shutting down its core digitisation programme at the end of June due to lack of capital and operating funding, with many millions of records still not digitised.
Last month, Archives said technology advances had opened the way to "reduce the demand for future physical property storage solutions by transitioning more towards digital collections management".
This was a month before it was revealed this week digitisation was stopping.
Archives' new building in Wellington will not be nearly big enough for all its records, and it has also run out of money to build a new storage facility in Levin, orphaning the $12 million spent on that already.
"Te Rua Mahara currently has space for all records in [its] control," chief archivist Anahera Morehu told RNZ in a statement on Thursday evening.
Records would always continue to grow, she said.
"To meet future demands and the expectations of New Zealanders, we are looking at our future physical and digital storage requirements."
It was now working with the National Library on how to "maximise their shared property footprint" and develop shared digital capabilities.
Archives has digitised almost 2 million images since 2017 - but it holds 8 million records, and to digitise these requires several images of each.
It sped up over time, from digitising just 150,000 images a year to 400,000.
Archives has lacked a national property strategy, documents showed. This left many historical records still with other agencies in storage.
It lacked capacity to store not just those, but all the new digital records being created.
The agency bought land in Levin for $4.9m with Budget 2020 funding, then spent another $5m on plans, but Internal Affairs failed to get more funding in 2022 to build on it. This was despite the government knowing that the Wellington headquarters under construction would offer only "a small amount of shelving space" for extra records.
Last month came the final chop.
"As the department was not successful in securing further funding for the construction and operations of the facility, and does not expect to in the current climate, the work has been stopped.
"The project was not funded for construction and is not going ahead," Archives said in a statement.
It said shutting down digitisation was not due to the public sector cuts.