New Zealand Prime Minister John Key has paid tribute to Singapore's founding Prime Minister, Lee Kuan Yew, whose death was announced on Monday.

"Mr Lee made an extraordinary contribution to Singapore, both as it found its way to independence in 1965 and in the 50 years since then," Key said in a statement.

"A man of rare qualities, Mr Lee's courage, determination, commitment, character and ability made him a formidable leader who held the respect of Singaporeans and the international community alike."

Known as one of Singapore's founding fathers, Lee had guided the development of a country that had become a world leader, and was instrumental in the establishment of the Association of South East Asian Nations (ASEAN), which had offered cohesion and stability in a diverse region.

"Mr Lee provided a unifying presence in his country since its creation as a state in 1965. His loss will be deeply felt by his family and the people of Singapore," said Key.

"I had the honor of meeting Mr Lee in 2007 during his last official visit to New Zealand. He was well known for his insights and foresight, but what struck me most was his unwavering determination to see Singapore succeed," he said.

"A powerful advocate for the region and supportive of New Zealand's role in Southeast Asia and the wider world, Mr Lee was a close and long-time friend of New Zealand."