Police have named a man who shot a family member before he was discovered dead of self inflicted gunshots near Nelson overnight.

Ian Boyd, 58, shot a 30-year-old man in the upper body prompting an armed offenders squad (AOS) manhunt in the area around Tapawera, 58km southwest of Nelson, about 11.20pm, police said.

The shooting was believed to have happened in the nearby Tadmor valley, after a fight between the men.

AOS members and a paramedic were flown in by helicopter. The victim remained in a serious but stable condition in Wellington Hospital this afternoon.

Boyd, from Tapawera, left the address and police set up cordons and started a manhunt before his vehicle was spotted at 3.30am. Police followed it to a driveway and shortly afterwards three shots were heard.

Boyd was discovered dead with self-inflicted gunshot wounds to his upper body and face. A shotgun and a high powered hunting rifle were found in the vehicle.

Next of kin and the coroner had been informed, police said.

Police were investigating.

Police would not say how Boyd and the victim were related.

Police spokeswoman Barbara Dunn said the younger man was visiting from Christchurch and the pair had been involved in an altercation earlier in the evening.

The younger man had a tooth broken when he was punched in the face, she said.

About 600 people live in Tapawera and the surrounding area and many residents were unaware of the tragedy that unfolded overnight.

Chairwoman of the Tapawera District Community Council, Dinkie Phillips, was absolutely floored by news of the shooting: "You've knocked the wind out of my sails a wee bit," she told NZPA.

She said Tapawera was a close community and the shooting was totally out of the ordinary.

"This is Tapawera. We're a lovely place to live... I'm shocked."

She was not aware of any tensions in the town.

"I would say the community will be shocked and I daresay there will be a lot of people talking, as happens."

She said it was likely she knew the people involved considering the small size of the town.

Local vicar Bernard Portman was also unaware of the shooting: "It will hit the community hard," he told NZPA.

Mr Portman was preparing for his Good Friday service and said support would be available to residents.

Owner of the Tapawera Four Square supermarket, Kiran Patel, said he would probably know the people involved as everyone in town visited his shop.