Audioculture reported that Posa was playing the ukelele by the age of seven, and formed his first band at 18. His first big hit was Wheels, which sold 50,000 copies in 1961.
He suffered ongoing health problems after a car accident in 1970, and didn't record again until the '90s.
Tributes have poured in since his death, with TVNZ's former head of entertainment Peter Grattan calling him "the real deal on guitar ... a perfectionist".
"He could sing too, but seldom did. Had he started playing in the USA, he'd probably be world renowned today," Grattan said.
Fellow Kiwi musician Gray Bartlett told Radio NZ: "There's no question he's an icon in the guitar world in New Zealand. It's very sad ...
"There's no question that Peter is the end of an era, especially in guitar playing."
Others took to Twitter to mourn Posa's passing.
Read more: Steve Braunias on Peter Posa: The best and loneliest guitar player there ever was