Police received a report of a person struggling in the water off Marine Parade about 3.42pm.
It is understood that person is a 7-year-old boy who was among a group who were swept out to sea from the water's edge beside a freedom camping ground.
Police were at the scene. Coastguard and the Hawke's Bay Rescue Helicopter also responded.
Police Area Commander Inspector Marty James told Stuff it appeared the group was playing in the surf when the child was swept out.
The sea is rough today. Large waves can be seen crashing onto the beach.
Police were alerted after someone in a camp area called emergency services. Two officers, who were both trained lifesavers, a 27-year-old man and a 30-year-old woman, tried to reach the boy.
"They were able to reach him and get hold of him," James said.
"They stayed with him while Coastguard and the rescue helicopter were deployed. The three of them continued to be swept out. Unfortunately the child is deceased."
The helicopter lifted the trio from the water. St John Ambulance staff arrived but the child could not be revived.
Police thanked members of the public for alerting emergency services to the incident.
"Our thoughts are with his family and friends during this tragic time."
Marsh, who was in Te Awa to drop her husband off at work with her 7-year-old child, said she saw a bunch of police cars fly passed and a lot of people standing on the beach.
"We could see the people floating a couple of kilometres off shore in the ocean. The chopper came over.
"We saw two people who looked like they were part of the police get out of the helicopter, but you can see a couple of people getting plucked out the water."
It was devastating to watch the tragedy play out, she said.
"There were two guys with the floating things surf life savers us, who jumped into the water and started swimming out to get to the people.
A St Johns Ambulance spokeswoman said one ambulance and a rescue helicopter are at the scene.
Hawke's Bay Rescue Helicopter Trust general manager Ian Wilmot said: "We were tasked by police to a search just off Te Awa beach. It's not appropriate for me to comment any further than that."
Haumoana resident Erin Marsh, who was in Te Awa to drop her husband off at work, said the incident was "heart-breaking."
"I had my seven-year-old son in the car with me, so we went and had a look what was happening. We could see the people floating a couple of kilometres off shore in the ocean.
"We saw two people who looked like they were part of the police get out of the helicopter, but you can see a couple of people getting plucked out the water.
"There were two guys with the floating things surf life savers use, who jumped into the water and started swimming out to get to the people. But the waves were so horrendously huge that they were crashing them back into shore. They just couldn't get out there."
Marsh added: "It made you want to jump in to try and help, but you know you shouldn't. "It was the most horrendous feeling standing there knowing that people need help but you physically cannot do anything to help."
Big swells and unexpected waves are frequent at the beach which is not patrolled by lifeguards.
A Hawke's Bay Today photographer at the scene said the surf at the beach is "huge".
"On any given day it is a dangerous spot to surf," he said.
Surf Life Saving NZ is urging beach goers to be extra vigilant when taking to the beach, and reminded the public to "keep children close enough to cuddle and never swim alone."
Surf Life Saving New Zealand National Lifesaving Manager Allan Mundy said: "People think they are able, but haven't done an honest check of themselves. If they are in doubt of their ability in conditions then stay out, don't go in.
"The waves might look alright, but the rips are still there. If you're unsure that what you're looking at is a rip, don't get in the water. If in doubt, stay out."
Mundy added: "Swim between the red and yellow flags at a lifeguarded beach and remember the 3Rs – Relax and float, Raise your hand and Ride the rip."