Prime Minister John Key has hailed Sir Paul Reeves as one of New Zealand's greatest statesmen, after the former Governor-General lost his battle to cancer at the age of 78.

New Zealand's first Maori Governor-General was diagnosed with cancer and last month announced he was stepping back from most aspects of his public life.

Sir Paul was Governor-General from 1985 to 1990.

At the National Party Conference this morning, Mr Key said the nation was poorer for the loss of a man who devoted his life to compassionate service.

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"This was a life spent giving," Mr Key said.

"His contribution was enormous and New Zealand is a poorer place for his passing."

Mr Key said Sir Paul modeled his actions as Governor-General on the life of a bishop, saying a bishop travels, a bishop stands alongside his people and searches for common ground'.

"His tenure was one of inclusiveness and compassion."

Sir Paul did not end his service to New Zealand upon leaving Government House in 1990, Mr Key said.

He was Anglican Observer at the United Nations, observed elections in Ghana and South Africa, helped write constitutions for Fiji and Guyana and chaired the Nelson Mandela Trust.

At home he chaired the Queen Elizabeth II National trust and the Bioethics Council and helped to select judges for the new Supreme Court.

"He spent another two decades serving at the highest level. We are indebted," Mr Key said.

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A state funeral is being arranged for Sir Paul Reeves and details will be advised.

Former Prime Minister Helen Clark also paid tribute to Sir Paul.

"Am deeply saddened by passing away today of Sir Paul Reeves, former New Zealand Governor General. Rest in peace, Paul," she tweeted.

Green Party co-leader Metiria Turei said Sir Paul broke through many barriers to achieve what he did in his life, "particularly because he lived through a period of overt racism in New Zealand".

"Perhaps as a result, he was always a staunch advocate for those living in poverty and for peace and justice.

"In recent years he did great work to advance the Treaty Settlement process for his people.

"We will always be grateful for his advocacy and compassion," Mrs Turei said.

Anglican Church spokesman Archbishop David Moxon said Sir Paul "aimed to bring people together, to listen to people at the edges and to speak to issues".

"In his role he was always present amongst the people. He continued to follow the gospel and remained a bishop contributing a great deal to our church and community. Bishop Paul was and remains a taonga to us and future generations."

Sir Paul is survived by his wife Beverley, Lady Reeves, his three daughters, Sarah, Bridget and Jane, and six grandchildren.