Emergency services were called to Tramway Rd, in the south of the city, just after 1am.
The fire gutted two flats in a block of five.
In a statement, police said the dead man was subsequently found in one of the flats.
''Police are currently in the process of identifying the man and locating his next of kin,'' the statement said.
''The cause of the fire is not known at this stage.''
Southland assistant area commander Deane Chalmers said it did not appear the fire was suspicious.
Two fire investigators and police were investigating the blaze.
''Two middle flats were well involved when our guys arrived,'' he said.
''On arrival it was reported that there was the possibility of people being trapped.
''Police [who were already at the scene] also confirmed there was one person believed to be inside.''
There was ''significant damage'' to the structure of the two flats directly affected by the blaze and smoke and some fire damage to the other flats, he said.
''They are essentially two-storey flats with a small garage below and a living quarters above.''
A police spokeswoman said the tenant of the flat, where the dead man was found, was able to escape the blaze unharmed.
''A man, believed to be known to the occupant but not a resident there, was located deceased in the building a short time later,'' she said.
Invercargill CIB were working with fire investigators to determine the cause of the blaze.
''Police are not in a position to confirm the man's identity until a postmortem is complete. However, we are speaking to likely next of kin,'' she said yesterday afternoon.
