A 26-year-old who has been speaking with police in relation to the disappearance of Grace Millane will be charged with her murder, police say.

Police updated media late tonight, the latest in a day of dramatic developments around the alleged fate of the British backpacker who vanished after entering a downtown hotel with the man a week ago tonight.

The man will stay in police custody until he appears in the Auckland District Court on Monday morning and no further updates are expected from police until 10.30am tomorrow.

The family of Millane have asked for privacy and won't be making further statements at this stage, police said.

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This afternoon, a week of fading hopes came to a devastating end when police said they believed the 22-year-old from Essex had been murdered — although no body had been found.

The tourist hadn't been seen since she entered downtown Auckland's CityLife Hotel in the company of a 26-year-old man on Saturday, December 1.

In a press conference late this afternoon, Detective Inspector Scott Beard said that man — named as a person of interest yesterday — had been taken to Auckland Central police station and was speaking to investigators "in relation to the murder of Grace Millane".

"Sadly the evidence we have gathered to this point of the inquiry has established that this is a homicide."

Detective Inspector Scott Beard of NZ Police today announced the disappearance of 22-year-old Grace Millane is now a homicide investigation. Photos / Supplied / Doug Sherring
Detective Inspector Scott Beard of NZ Police today announced the disappearance of 22-year-old Grace Millane is now a homicide investigation. Photos / Supplied / Doug Sherring

Police still didn't know where Millane was — but were determined to return her to the family who have spread word of the talented artist and university graduate's disappearance worldwide since her daily social media contact with family stopped the night before her 22nd birthday last Sunday.

The much loved daughter and sister arrived in New Zealand on November 20, as part of a year-long, worldwide overseas experience that began earlier this year in South America.

Millane's father David, a millionaire property developer, flew into New Zealand early yesterday.

Fighting back tears, he spoke to media about the "lovely, outgoing, fun-loving, family-orientated daughter" who had been so looking forward to going to New Zealand and had "bombarded us with numerous photographs and messages of her adventures" since arriving.

Recent posts on Millane's Instagram showed her smiling with fellow tourists at Cape Reinga, at a Bay of Islands waterfall, up Auckland's Sky Tower and at a live music gig.

Police had spoken to Millane's family this afternoon, Beard said.

"They're devastated."

Officers found the 26-year-old man at a central Auckland address at 3pm, and interviews took place through the afternoon.

A vehicle of interest had been secured and police were trying to find out exactly where the vehicle had been since Millane's disappearance. He wouldn't give a description of the vehicle or say where it was found.

This morning police released photos of a necklace and pink Casio Baby-G watch Millane was thought to be wearing when she disappeared, and said her passport was also missing.

They still wanted to hear from anyone who had seen any of the items, or the black dress and white sneakers Millane was wearing when she was last seen.

"You know, that property is going to be somewhere. Her clothing's going to be somewhere, we haven't found it, and somebody may find it."

Her other belongings had remained this week at Base Backpackers, where she had been booked in to stay until today.

CCTV footage captured Millane leaving Andy's Burgers & Bar, on the first level of Sky City, at 7.15pm last Saturday, December 1.

At 9.41pm Millane and the 26-year-old man taken in by police today were seen on CCTV entering CityLife Hotel, which has entrances on both Queen and Durham Sts.

Police had identified the man by yesterday and spoken to him before he was taken to Auckland Central police station today.

Grace Millane was last seen on December 1 on CCTV at the CityLife Hotel in downtown Auckland. Photo / Supplied
Grace Millane was last seen on December 1 on CCTV at the CityLife Hotel in downtown Auckland. Photo / Supplied

Asked why police were now treating Millane's disappearance as an murder, Beard said it was a combination of factors.

"The evidence we have located so far, our scene examination, from the CCTV footage we have and our investigation has determined that Grace is no longer alive and this is a murder investigation."

Police had "no reason or understanding what the motive was", he said.

Millane and the man being interviewed by police were together on Saturday evening and went to a number of places before going into CityLife Hotel.

When asked if Millane knew the man before the evening she disappeared, Beard would only say that "we don't have any evidence of that at this stage", and wouldn't comment on whether the pair met on Tinder.

"All I can say is that we know they were together from the time at the Sky City Hotel ... I'm not going to speculate on how they met. This issue here is Grace is still missing and we want to find her."

Beard wouldn't say whether police had seen footage of the man leaving CityLife Hotel or if he thought Millane was killed in the hotel, a large apartment-style complex.

Police yesterday identified an apartment of interest and a scene examination by police and forensic experts was still taking place, he said.

They had received "a lot" of phone calls from the public and those were being "worked through and prioritised".

"But as you can appreciate the focus is on the 26-year-old male and also finding Grace."

Today's news has been greeted with an outpouring of grief on social media.

The Lucie Blackman Trust, which has been supporting Millane's family, posted on its Facebook page that they were "incredibly saddened" by the police announcement.

"Thank you to all who helped try and find Grace. Our thoughts are with her family at this awful time."

The trust was set up by family of a British woman who disappeared and was later found dead in Tokyo, and supports families of Brits in crisis overseas.

An emotional Beard said it had been a tough time for all involved in the investigation.

"Everybody who is a parent will understand what the family is going through ... our hearts go out to them."

That was especially so for David Millane, as police had met the distraught father, but also for other family in the United Kingdom, including Millane's mother Gillian, unable to travel to New Zealand because she was recovering from an operation.

"I know that the thoughts of all New Zealanders will be with Grace's family tonight and I want to reassure both everyone here and abroad that New Zealand police are determined to do everything we can to find her."