A youth has appeared in court this afternoon charged with the murder of an 8-year-old in Otautau yesterday.

Emergency services were called to Otautau, a small town northwest of Invercargill, yesterday at around 10.30pm after members of the victim's family notified police of the death.

Police arrested the youth this morning.

Police have provided few details of the incident, which has rocked the small rural settlement.

The youth said little to the judge during the hearing this afternoon.

Judge Bernadette Farnan suppressed most of the details of the hearing, including the accused's name and age, and the name of the victim.

The youth will next appear in the High Court in Invercargill next month.

Southland area commander Inspector Mike Bowman said a forensic examination is now being completed at two Otautau addresses.

"The man was taken into custody shortly after police were notified in the early hours of this morning.

"We expect the houses will undergo at least two days of investigation and properly, and possibly into the weekend."

He said police were speaking with a number of witnesses.

"We wish to reassure members of the public this was an isolated incident and there is no threat to their safety."

"This is a tragic, tragic event involving an 8-year-old child."

It will take a number of days, if not a number of weeks to complete the inquiry, Inspector Bowman said.

'Traumatic for the community'

Southland Mayor Gary Tong, a former police officer, said the rural town of about 700 people near Invercargill was a tight-knit community.

"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."

Police were called to the scene in Otautau yesterday. Photo: RNZ/Tim Brown

Mr Tong said he got a call about the incident in the early hours of the morning and would be assisting police and the other emergency respondents in any way possible.

Otautau Gallery owner Pamela Hopkins said the small rural town was in a complete state of shock.

She said she heard sirens late last night and saw police cars this morning.

Ms Hopkins said Otautau was a good and close-knit community and people would support each other through the tragedy.

Police said anyone with any information that will assist with this investigation should contact them on 105.

Southland area commander Inspector Mike Bowman said two Otautau addresses were currently under police guard. Photo: RNZ/Tim Brown