Lujan Grisham, a Democrat, said in a statement she was “proud” to sign the measure into law.
The day that traditionally honors the Italian explorer will now honor native people and the tribes that populated New Mexico before Europeans arrived.
"This new holiday will mark a celebration of New Mexico's 23 sovereign indigenous nations and the essential place of honor native citizens hold in the fabric of our great state," she said. "Enacting Indigenous People's Day sends an important message of reconciliation and will serve as a reminder of our state's proud native history."
New Mexico's Senate passed the House legislation last month sending the bill to the governor's desk.
Navajo Nation President Jonathan Nez told the Navajo Post that the change is long overdue.
"For many years, Indigenous people have protested Columbus Day because it celebrates colonialism, oppression, and injustice inflicted on Indigenous peoples," Nez told the Post. "Observing Indigenous Peoples' Day allows citizens to recognize our rich heritage and represents a step toward healing and growth."
New Mexico followed Oregon, Minnesota, Vermont and Alaska in renaming Columbus Day Indigenous Peoples' Day. South Dakota celebrates Native American Day and Hawaii celebrates Discoverers' Day. Dozens of U.S. cities also now honor native people on the second Monday in October.