Smoking and vaping drove a jump last year in the number of school children punished with a stand-down of up to five days.
But an anti-smoking advocacy group said punishments that excluded students from school would not solve the problem.
Ministry of Education figures showed schools stood down 15,968 students 20,980 times in 2021.
That was about 2800 more stand-downs in 2021 than in 2020, but 1302 fewer than 2019.
The report said smoking and vaping were the main reasons for the increase over 2020.
"Breakdown of the smoking or alcohol category indicates that the number of stand-downs due to smoking has increased from 1210 in 2020 to 2865 in 2021," the report said. "This accounts for 59 percent of the increase in stand-down cases between 2020 and 2021."
The effect was even larger when vaping was included with smoking.
"The data shows that for 75 percent of [the] increase in stand-downs from 2020 to 2021, smoking or vaping was cited as part or all of the reason."
Action for Smokefree 2025 director Ben Youdan told Morning Report that while they do not want young people vaping or smoking, they do not want schools to stand pupils down for it and that doing so could be counter-productive.
"There's plenty of evidence from other drug and alcohol use that actually excluding kids for those things doesn't discourage them from using them and can even increase harmful use as well," Youdan said.
"That's because it's saying to kids 'you don't belong here because of that behaviour'. Kids need somewhere to feel like they belong, and they can have safe and open and honest conversations about vaping and smoking and other substance use as well, and if the school is excluding them it's not creating the space to deal with it as a health issue."
He said the best approach was for schools to talk to young people about things they were being exposed to help them understand the risks and feel empowered to say no to them, and to give them a way to access support to help change their behaviour or manage addiction.
"Smoking is now so low for young people, we're down to the 1 or 2 percent ... but vaping we've seen that really big increase, I think because it's novel, kids are curious about it... for a long time it was very unregulated."
New legislation was put in place late last year aimed at making it harder for young people to access vapes containing nicotine, and marketing, advertising and promotions for vapes were cracked down on the year before.
This month, Parliament passed a new law to ban the sale of tobacco to anyone born after the 1 January 2009.
Youdan said there had been a recent shift in vaping use among young people.
"We're seeing probably about 10 percent of young people are vaping daily, and a lot more experimenting or using it regularly, we have seen an increase in that over the last two or three years.
"But actually for the first time this year we started to record that number flatlining and even starting to go down. I think the government regulations are starting to have an impact on stopping young people accessing vaping and starting to understand a bit more about what vaping is and and potentially the novelty is not quite there that it used to be."
School stand-downs across the board
Last year, physical assault was the main reason for stand-downs, at 28 percent of all stand-downs and 24 percent of all suspensions, the ministry report showed.
There were 2442 suspensions involving 2266 students last year.
Māori accounted for nearly half the stand-down cases and suspensions. The peak age for stand-downs and suspensions was 14.
The figures showed 733 students under the age of 16 were excluded from schools last year, about the same as 2021 but about 3000 fewer than in 2019.
A further 100 students 16 or older were expelled from schools, the lowest figure in the past 21 years.
"Continual disobedience and physical assault on other students were the main reasons for exclusions," the report said.
"These behaviours accounted for 55.5 percent of all exclusions. Physical assault on staff was the next highest behavioural reason at 7.6 percent of all exclusions, followed by drugs - including substance abuse - at 7 percent of all exclusions."
West Coast schools had the highest stand-down rate at 57.9 per 1000 students, followed by Chatham Islands at 56.2, Manawatū-Whanganui at 41 students and Southland at 40.1.
Northland had the highest rates of exclusion at 2.9 per 1000 students, and of expulsion at 4.3 per 1000 students aged 16 and above.
The report said a stand-down removed a student from a school for no more than five days in a school term, and suspensions removed pupils until a school's board could consider their case.
Exclusion or expulsion formally removed a student and prevented them from returning to a school, but exclusions applied only to students under the age of 16, who were required to enrol at another school.