Auckland Domain, where the costumed group were seen.

A group of people who dressed in costumes similar to terror group Islamic State's military uniform for a Christmas party have sparked a panicked call to police in Auckland.

Police received a call from a man who had spent the morning with his son at the Auckland Domain in Parnell.

Senior Sergeant Danny Meade said police were told the group were dressed similar to Isis. They were wearing dark military gear, were carrying toy guns and had colourful balloons tied to their chests.

NZ DEFENCE FORCE Aucklanders pay their respects at the war memorial on Anzac Day.

It's understood the group were attending the costume club Matsuri Christmas Cosplay annual Christmas function at the rotunda. Police did not attend the incident.

"The member of the public was concerned because it was too close to the war memorial for their comfort," said Meade.

"We did not attend as it was obvious that it was meant to be in jest, if you can find that kind of thing funny."

Meade said none of the group were causing trouble, and it was "very clear" they were dressed in costume.