The daughter jumped in the river to rescue the dog and Toon is understood to have jumped in after her.
She was rescued and taken to Palmerston North Hospital with non-life-threatening injuries.
Toon's body was found about 9.30am by members of the Police National Dive Team. He had been missing since last night.
In a media conference this afternoon, police said they are mourning the loss of a much respected police officer Central District and a loving father.
"He'd gone into the river to help his daughter, who was trying to rescue their family dog from the water," said superintendent Sue Schwalger, Central District Commander.
He has also been described as "a generous man with his time and infectious personality".
"He was a loving family man and a man who would give you the shirt of his back and always had time to help others," said Schwalger.
Judge Lance Rowe paid tribute to Toon in the Palmerston North District Court this morning.
"Those comments are much appreciated and I would like to thank Judge Rowe for his condolences," said Schwalger.
"I would also again thank all our emergency and response partners who were part of the search in such tragic circumstances."
Schwalger said outside the Palmerston North Police Station this afternoon that Toon's daughter and dog (whose name she did not know) are both recovering well.
"Obviously at this time it's really tough for the family. They are in shock."
According to Schwalger the man was a reasonably strong swimmer.
"We are a large police family and it affects everyone. We all suffer a loss today,' said Schwalger.
Schwalger described the conditions of Manawatu River last night as at "an increased level" that was "flowing reasonably fast".
Several police officers were at the scene this morning. When Toon's body was removed in a body bag, officers formed a guard of honour as it was carried into the hearse.
Schwalger said of her colleague: "It is with great sadness that police can confirm that the man whose body was recovered from the Manawatu River this morning was a police officer.
He said Toon had worked for many years as a prosecutor, reported Fairfax, and described him as a "humane" prosecutor who would be a loss to police, the local court and the city.
Judge Rowe extended condolences to the man's family and to the police.
Toon was involved in several cases in the Palmerston North District Court and Dannevirke District Court.
They included a 19-year-old man who stole hundreds of dollars worth of food from his former employer McDonalds in 2014 and the case of two young men dubbed "the dumbest pair of burglars ever" after police disturbed them when they were called to investigate a car with covered number plates.
Before Toon's body was found, search and rescue workers were gathered around a spot near Fitzroy Bend.
As police were searching this morning, nearby residents continued to use the popular recreational pathway, walking dogs or riding bikes past the site.
The Fire Service provided a specialist command unit and lighting as police searched through the night.
A resident on Buick Cres, which runs beside the river, said she heard the rescue helicopter late last night searching along the river heading towards Longurn.