His uncle, Daniel Ili, found his body underwater after a desperate search by friends and family.
"At 1pm or 2pm we started looking for him, it was close to 3pm, and we found him in the middle of the river," Mr Ili told Fairfax.
He said the lagoon was deep - up to his waist - and a group of children saw something beneath the water, which turned out to be the little boy's body.
"I went close to the middle of the river to look for him. While I was walking in the river I kicked someone under the water. I picked him up, and it was Jimmy," Mr Ili told Fairfax.
Surf lifesavers tried desperately for almost an hour to revive Jimmy, spokesman Jacob Davies said.
Two guards called to the scene by a member of the public about 2pm and attempted CPR for 40 to 45 minutes until firefighters and a rescue helicopter crew took over.
Jimmy's body was flown to Hawke's Bay Hospital in Hastings by the local rescue helicopter service.
Police were investigating and said the death would be referred to the coroner.
Jimmy's uncle told Fairfax his mother was looking after her two other young children, 18-months and three, at the time of his death.
He said Jimmy was playing with other kids and " everyone was surrounding him."
This year's seasonal drowning statistics are off to their worst start since 2003, when five people died in the first two days of the Christmas holidays.
A 17-year-old teenager has been missing since Christmas Day, when he and his girlfriend went for an afternoon swim at Whanganui's Castlecliff Beach after Christmas lunch.
Yesterday an 82-year-old English woman in the Bay of Islands drowned after she fell into a pond during a medical event.
And two people, understood to be tourists, drowned on Christmas Day at a west coast beach near Raglan - while a third member of the party was airlifted to Waikato Hospital.
He was released yesterday.
