A murder investigation is underway following the discovery of a two-year-old's body in the Bay of Plenty.

A police spokesperson says Whakatane Police were called to the Matahina Dam area following the report of a two-year-old child missing in the Rangitaiki River around 6pm on Sunday.

"An extensive Search and Rescue operation was commenced, with the body of the child being located in the river at about 11pm.

"A homicide inquiry has been commenced and Police are speaking to a person of interest," says a police spokesperson.

"Police are not seeking anyone else in relation to this inquiry."

Matahina Dam. Google Images.