Police have arrested and charged a youth with murder after the death of an 8-year-old boy in Otautau, Southland.

Southland Area Commander Inspector Mike Bowman said the male would appear in the Otago Youth Court later today.

The 8-year-old boy was found dead last night in the small Southland town - sparking a homicide investigation. He has been described as a "brainy kid'' who touched the hearts of all those he met.

Police have launched a homicide investigation after a youngster was said to have died in suspicious circumstances in Otautau - a small farming town about 45 minutes west of Invercargill.

The victim is understood to be a boy who attended the local school.

Family friend Karl Jackson said he got a phone call from the boy's father about 9pm yesterday telling him his son was dead.

"He didn't know what to say last night. He just broke down...he will never be the same''.

Jackson said the family was not new to the area, but had just moved into a new house in Otautau a week ago.

The boy was gifted at arts and crafts, he said, and was a "brainy kid''.

"All his mates will be mourning,'' Jackson said.

"He touched every heart that he saw''.

A reporter at the scene this morning said about six houses were inside a police cordon in Eton St and one in neighbouring Rye St.

She could see three police cars next to the cordon and a police officer was asking people who entered Eton St for details, including name and address.

Southland Police area commander, Inspector Mike Bowman, said it was an "isolated incident''.

"Police are speaking to a number of witnesses in relation to the incident.

"We wish to reassure members of the public this was an isolated incident and there is no threat to their safety.''

It is understood there was a hive of police activity in the area late last night - around 11pm, after police were called to the area about 10.30pm.

Police would not say whether they were looking for anyone in relation to the incident or whether anyone has been taken into custody.

Southland Mayor Gary Tong said the small community was in shock.

Tong, a former police officer, said the rural town of about 700 was a tight-knit group.

"It'll be traumatic for the community. I don't know the full details at this stage but hearts and thoughts are with the families and those that attended the incident as well - they're all volunteers in that area."

Tong said he got a call about the incident early today and would be assisting police and the other emergency respondents in any way possible.

Two properties remained under police guard early this morning, police said.
The circumstances of the child's death are not yet known.

A southern fire communications spokeswoman said they were called to a "medical response'' to the area last night, but referred all other inquiries to police.

Police are appealing for anyone with any information to contact authorities immediately.

A St John spokesman said emergency services were notified about the incident at 10.28pm last night.

One ambulance and one first responder attended the scene.

Can you help? Call Invercargill Central Police on: (03) 211 0400, the non-emergency police hotline 10-5 or anonymously via CrimeStoppers: 0800 555 111.

- additional reporting: Vaimoana Tapaleao and Radio NZ