Tonga's flamboyant and sometimes controversial monarch King George Tupou V has died in a Hong Kong hospital at the age of 63.

King George was diagnosed with cancer last year, and also had diabetes.

He was a colourful and at times controversial character who lived a lavish lifestyle.

He was crowned as the monarch of the small Pacific nation in 2008, following the death of his father in 2006.

The coronation was a multi-million dollar affair lasting several days. One ceremony involved the king being presented with 70 cooked pigs and hundreds of baskets of food.

King George had a penchant for elaborate uniforms and was driven around his country in a London taxi cab.

In an interview last year, he said the cab was the most sensible choice of transport for someone in his position.

"A London taxi has the right proportions and makes it easy for you to get in and out whilst wearing spurs and a sword," he said.

"I realise that these criteria are not everyday considerations for the ordinary mum and dad when they come to buy a family car."

The New Zealand-educated monarch, who also trained at the Sandhurst military academy in England, was credited with paving the way for Tonga's first democratic elections in 2010.

He relinquished most of his power after taking the throne, abolishing 165 years of feudal rule.

Tonga's prime minister has confirmed the king's death, which happened over the weekend, in a statement on public radio.

New Zealand prime minister John Key says the king leaves behind a great legacy.

"He was the architect of the evolving democracy in Tonga and played an instrumental role in making that happen," he said.

This morning Prime Minister Julia Gillard also extended her condolences to the people of Tonga.

Ms Gillard said King George guided his country through constitutional change towards democracy and was a "great friend" of Australia.

Tonga's Honorary Consul to Australia, Louise Raedler-Waterhouse, says King George was a close friend.

"His last, probably official duty was to have an audience with His Holiness the Pope and he was [also] in Sydney because he'd come here especially for my father's 90th birthday," she said.

The main religious body in the kingdom, the Free Wesleyan Church, has announced it will be holding a prayer service at the official residence of the King's mother in the capital, Nukualofa.

King George will be succeeded by his brother, crown prince Tupouto'a Lavaka Ata.