Prime Minister Malcolm Turnbull told Sunrise this morning: "It is a tragedy. Our hearts go out to his family. I can't provide any more details at this stage. It's a shocking tragedy - a young life lost."
An NYPD spokesman confirmed the death was being treated as an accident.
Police sources also confirmed accounts given to the New York Post that Mr Simpson died while playing "trust".
'TRUST GAME'
"I will prove it that you can trust me. Let's play the trust game," Mr Simpson said to the 24-year-old man just moments before he slipped and fell, sources said.
Mr Simpson was Australia's second secretary to the United Nations. He lived with his wife at the Lower East Side apartment building where he died.
He regularly travelled overseas for work, including a recent trip to Ecuador where he was part of a 55-person delegation studying development.
Mr Simpson and his wife were out with friends for dinner and drinks before the group returned back to the Clinton St residence and went up to the roof to the enjoy the views of the Empire State Building, which was lit up in rainbow colours in celebration of Australia's same-sex marriage vote, witnesses said.
While on the roof, the diplomat, who serves as the second secretary to the UN for Australia, then climbed to a higher roof landing where he began swinging a female friend around, sources said.
Once he put her down, everyone decided to go back inside.
While inside, the 24-year-old man, who is the husband of the woman Mr Simpson had been swinging, confronted Mr Simpson over the gesture, sources said.
The two men then stepped back outside, where Mr Simpson told the husband that he meant no harm, according to sources.
To prove to the husband that he could trust him, Simpson suggested playing the "trust game" - in which Mr Simpson would lean back on the ledge and trust the man to catch him before he would fall.
Mr Simpson climbed onto the ledge and began to lean back.
The man told investigators that he put his arm out to catch him, but Mr Simpson slipped and fell to his death, according to sources.
Mr Simpson was rushed to Mount Sinai Beth Israel hospital where he was pronounced dead.
Police told news.com.au the incident was being treated as an accident. The medical examiner's office will determine the official cause of death.
All those who police interviewed admitted to drinking alcohol that night and cops reported a strong odour of booze on those involved, sources said.
The Permanent Mission of Australia to the United Nations and the Department of Foreign Affairs and Trade are yet to respond to requests for comment from News Corp Australia.
