It is understood there was a hive of police activity in the area late last night - around 11pm.
Police said they were called to the area about 10.30pm yesterday.
They would not say whether they were looking for anyone in relation to the incident or whether anyone has been taken into custody.
"More information will be released proactively when it becomes available,'' police said.
Southland Mayor Gary Tong said the small community was in shock.
Tong, a former police officer, said the rural town of about 700 was a tight-knit group.
"It'll be traumatic for the community. I don't know the full details at this stage but hearts and thoughts are with the families and those that attended the incident as well - they're all volunteers in that area."
Tong said he got a call about the incident early today and would be assisting police and the other emergency respondents in any way possible.
Two properties remained under police guard early this morning, police said. The circumstances of the child's death is not yet known.
A southern fire communications spokeswoman told the Herald they were called to a "medical response'' to the area last night, but referred all other inquiries to police.
Police are appealing to members of the public who may have information about the incident to contact authorities immediately.
Anyone with information is asked to contact Invercargill Central Police on: (03) 211 0400, the non-emergency police hotline 10-5 or anonymously via CrimeStoppers: 0800 555 111.
- with RNZ