"From what I heard he toppled head over heels and from what I can see he has landed on a building and then hit the ground."
It is understood a woman, believed to be the man's girlfriend, arrived at the scene shortly after the crash which police confirmed happened at 10.10am.
"As you can imagine it was pretty awful when his girlfriend arrived," the man said.
A witness from Holland told the Otago Daily Times the man fell for five seconds.
"It was really high," she said.
"We saw them making a loop, sort of, and then they fell in his paraglider."
Her friend said: "They dropped, with their back to the ground.
"It's so terrible."
Queenstown Primary principal Fiona Cavanagh said the staff were "shocked and saddened" to hear of the death on school grounds.
She said the school had a contract that allowed paragliders to land on the bottom field at the school.
Cavanagh said there had not been any other serious accidents in the three years she had been principal.
She said the death would not affect the current agreement.
The Night Noodle Market planned for tonight would go ahead despite the death.
"We are about to have a blessing of the land by a local kaumatua," Cavanagh said.
It is understood the man was an independent recreational paraglider and was not a customer of local company G-Force Paragliding.
Police confirmed the death and said the Civil Aviation Authority had been notified.