Low ratings in the United States have led to the show's demise after six years. Filming of the fantasy action series, at locations around West Auckland, will finish next April.
Lawless said the show had changed her life in every way.
"Not only did I meet my husband Rob [Tapert, the series creator and executive producer], the man of my dreams, I also had the privilege of working with the most gifted and hard-working crew imaginable," the actor said from Los Angeles.
The axing will put between 150 and 200 production crew and actors out of work.
And local businesses will lose millions of dollars of income.
Industries as diverse as catering and timber will be affected.
The show's American production company, Pacific Renaissance, has put tens of millions of dollars into the New Zealand economy since the first Xena series.
But the decision to cancel the show is not regarded as a blow to the local production industry.
The Screen Directors and Producers Association said Xena had lasted longer than most television series, and its crew would find work elsewhere.
"A huge leap of faith was made by the Americans and the secret was to have high-quality New Zealanders managing the production," said association chief executive Jane Wrightson.
"There was little cultural clash and they were able to get on making television in the very effective manner we are known for."
She said the Xena crew would find work in the many productions now being made, but it was hoped that Pacific Renaissance would eventually set up another series.
Lawless, who is doing the American talk-show circuit this week, said she would look back on Xena as one of the most challenging and happiest times of her life.
It has made her one of New Zealand's richest women, estimated to be worth $11 million.
Lawless said that she was utterly committed to making the last episodes the best done on the show.
The show won high ratings in its early seasons on US television, but lost viewers as it was gradually forced out of prime-time slots.
Here, TV3 screened Xena free-to-air for the first three seasons and plans to screen the final three series.
Sky 1 is now screening the fourth series, but says it also wants to buy the last two series.
Lawless will be continuing production on the final series next month.
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