A man has has been arrested this afternoon and charged with the murder of a Bay of Plenty school principal in Whakatane.

Hawea Ralph Drummond Vercoe, 36, of nearby Rotoiti, died after he was apparently punched to the ground outside the Quart House bar on The Strand about 2.30am today.

A 21-year-old Opotiki man was being held in custody and would appear in Whakatane District Court tomorrow morning charged with murder, police said.

Mr Vercoe was principal of Rotorua school Te Kura Kaupapa o Te Rotoiti, a Maori seat councillor on Environment Bay of Plenty and on the Rotorua District Council's Te Arawa standing committee.

Quart House owner Grant Webb said he was not working last night but had watched CCTV footage of events leading up to Mr Vercoe's death.

The alleged offender was leaving the bar at the same time as Mr Vercoe.

"[Mr Vercoe] carried on walking go to the pedestrian crossing and this fella had just taken offence to something and just king hit him and he just ended up dying out there," he told NZPA.

There was no suggestion Mr Vercoe was intoxicated, he said.

"It wasn't a drunken brawl or anything like that -- it just came completely out of the blue. No one had chance to react it just shocked everybody."

His staff were among the first at the "traumatic" scene, Mr Webb said.

"I'm not sure how quickly he died, but he was beyond help by the time they got there that's for sure, which is a matter of seconds."

Mr Vercoe's family were this afternoon doing a blessing and a karakia on the street outside the bar, he said.

"It's heartbreaking for the town, heartbreaking for us and especially heartbreaking for the people I'm seeing outside right now."

Mr Webb had owned the bar for about five years, which did not see a lot of fights, he said.

The bar was closed today to reopen tomorrow, he said.

Mr Webb did not know Mr Vercoe personally, but said he was well known around the town.

A port mortem would be carried out on Mr Vercoe's body tomorrow, said Detective Senior Sergeant Greg Standen of Whakatane police.

"It is still too early to say exactly what has happened, however it does appear that some sort of fight broke out which resulted in the deceased being punched to the ground."

That may have caused Mr Vercoe's death, he said.

Officers were interviewing several witnesses and wanted to hear from anyone else who saw the incident or had any relevant information.

Mr Vercoe had brushes with the law this year.

In September he was convicted of threatening behaviour towards his former wife's new partner, who he allegedly threatened to put in a wheelchair.

He was ordered to pay $400 court costs, and faced losing his job at the school.

Mr Vercoe also made headlines when he advocated for his school to be allowed Maori school signs, or kura, on its buses, leading to a policy change by Land Transport New Zealand.