A bomb squad has been called to a rural Northland home following a fatal house fire early this morning.

The police Armed Offenders Squad were negotiating with a man before he was found dead after they were called to the property after reports of firearm being fired.

Police confirmed they had found an explosive device, believed to be a grenade, when they entered the house.

Northland Inspector Kevin Burke said the Defence Force bomb disposal unit was now on its way from Auckland to dispose of the grenade and check that the house was safe before police could carry out a scene examination.

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Police were called the Mangamuka property, south of Kaitaia, at 2.30pm yesterday.

Northland police spokeswoman Sarah Kennett said there was a dispute at the property over a trespass matter.

About 12.30am today a fire was noticed inside the house. AOS attempted to enter the address to rescue the occupant but they had to pull back due to a number of explosions.

The Fire Service was called and once the fire had been extinguished police were able to enter the house and found a man's body.

The man's name will not be released until next of kin have been notified.

Fire Safety investigators are working with police to establish the cause of the fire.