Police said Mr Senior took the hovercraft to the beach for its first test run and was operating it when the propeller came loose. It fell and the blade struck him on the back of the head.
Police initially said the blade decapitated Mr Senior, however they confirmed yesterday it had severely damaged the back of his head causing fatal injuries.
Mr Senior, whose partner and neighbour witnessed the gruesome incident, died instantly.
His family were too distraught to speak about his death yesterday. Relatives were on their way to New Zealand from the UK, where he was born, for his funeral.
Sergeant Colin Nuttall of the Waitemata Serious Crash Unit said Mr Senior died as a result of a "structural failure" of the hovercraft.
A source told the Herald the hovercraft was similar to an air boat commonly found on swamps in the US. The propeller was attached to an "A-frame-like" structure at the back of the hovercraft.
It is understood the brackets holding the structure on to the hovercraft had loosened.
Mr Nuttall refused to speculate on the details, saying the incident was still under investigation.
"What caused that is what we're investigating," he said.
"We have outside assistance from an engineer who specialises in hovercrafts. But there's no further information we can release."
Mr Nuttall said it was not clear where Mr Senior got the design for the hovercraft - whether he had drawn it up himself or sourced it from elsewhere - but he built it himself.
The Herald was told Mr Senior had "hovered" the craft at home but police said Sunday was the first time he had taken it on the water.
He had done several laps and was extremely happy with the way it was operating before the accident.
Maritime New Zealand said they would provide assistance to police if required.
MNZ is the agency charged with regulating commercial hovercraft in New Zealand. Private hovercraft use, including the design and building process, was not regulated.
An MNZ spokeswoman said commercial hovercraft were required to have a safe operational plan which must be approved by the director of Maritime New Zealand.
"When operating on the water, hovercraft operators must follow the same rules as recreational boaties; the "rules of the road on the water".
"If operating on land, hovercraft operators must follow the applicable rules as other vehicle operators."
The spokeswoman said MNZ was not aware of any other incidents involving hovercraft in recent years.
