An altercation between three people in downtown Wellington at about 3.30am on Sunday attracted the attention of local police.
The incident has been described privately to AAP as a "drunken punch-up" involving the male partner of an Australian diplomat stationed in the Kiwi capital.
"Police took one person into custody who was later released without charge after it was confirmed they held diplomatic immunity," a NZ Police spokeswoman said.
The incident reportedly happened after the Bledisloe Cup match in Wellington at the weekend. (Andrew Cornaga/AAP PHOTOS)
The identity of the man has not been released but it's understood the person involved is not the partner of Australia's High Commissioner in Wellington, Harinder Sidhu.
The Department of Foreign Affairs and Trade lists 18 Wellington-based staff on its website, along with six male partners, who are offered the benefit of diplomatic immunity.
Diplomatic immunity is a right afforded to representatives based overseas that allows them freedom to conduct diplomatic business without being arrested or detained.
However, owing to the seriousness of the alleged crime, NZ police confirmed they had begun a process to have the immunity stripped.
A decision on whether to revoke the privilege is likely to fall to Australian Foreign Minister Penny Wong.
The foreign affairs department is yet to respond to requests for comment on the incident, which was first reported by Sky News.
It is understood the man was wearing Wallabies supporter gear during the time of the street fight.
Hours earlier the Australian men's rugby side lost 33-13 at Sky Stadium, the ninth-straight All Blacks win over the Wallabies.
New Zealand's Ministry of Foreign Affairs and Trade confirmed it had contacted Australia's High Commission over the incident.
"It is the expectation of the government of New Zealand that foreign representatives and their accredited family members will comply with New Zealand laws and regulations," a ministry spokeswoman said.
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