Former New Zealand prime minister Helen Clark has led tributes to Georgina Bayer, the world's first openly transgender MP, who has died.

Friends announced "with the heaviest of hearts" on Facebook on Monday that the 65-year-old had died at a Wellington hospice.

"Georgie was surround by her nearest and dearest 24/7 over the past week, she accepted what was happening, was cracking jokes and had a twinkle in her eye, right until the final moment," Scotty Kennedy wrote.

"Farewell Georgie, your love, compassion and all that you have done for the Rainbow and many other communities will live on for ever."

Ms Beyer, a former actor, drag performer, sex worker and radio host, was born in Wellington but moved to Australia as a young adult.

After moving back to New Zealand, she grew interested in a political career and in 1995, won the mayoralty in Carterton, a town 80 kilometres northeast of Wellington that served as a farming hub.

"It's less of a reflection on me but a wonderful reflection on them - rural conservative New Zealand. Who would have thought?" she told the NZ Herald in a 2018 interview.

Drafted to run for parliament for the Labour party, Ms Bayer pulled off an upset victory as Ms Clark's government took office.

The former prime minister said Ms Beyer "showed tremendous courage" stepping into public life and "the public warmed to her honesty".

"Her election speaks volumes about both Georgina's personal skills and dedication to community service and the district's willingness to accept her on her merits without discrimination," she said.

In parliament, Ms Beyer wasted no time displaying her now-legendary wit, drawing laughs from all sides of the house in her maiden speech.

"I was quoted once as saying this was the stallion that became a gelding and now she's a mare," she said.

"I do have to say that I have now found myself to be a member. So I have come full circle."

As an MP, Ms Beyer played a pivotal role decriminalising prostitution, credited with changing a handful of votes on the bill which passed 60 votes to 59.

"On the third reading of the Prostitution Reform Act, I got up and said, 'I will assume Mr Speaker that I am the only person in this chamber who has ever worked in the sex industry'," she said.

"I paused and looked around to see whose hands were going to go flying up. Of course there weren't any. In that moment I guess they gave me tacit approval that I was the expert on this thing in this chamber."

Ms Beyer also suffered greatly during her life, alleging she was "brutalised, exploited and pack raped" during her time as a sex worker in Sydney.

"I've had to endure that kind of thing and it either kills you or it doesn't. What doesn't kill you makes you stronger," she said.

In 2020, Ms Beyer was made a Member of the New Zealand Order of Merit for services to the rainbow community.

Current Wairarapa MP Kieran McAnulty, who was baby sat by Ms Beyer as a child, said New Zealand had "lost a great one".

"She was a beloved family member, loyal friend, passionate advocate for the LGBTIQA+ community and a powerhouse of a local politician," he said.

"I met up with her two weeks ago to chat about her battle with kidney disease, something that my family have also been affected by. Her spark was still very much intact."

Prime Minister Chris Hipkins also offered his condolences, saying Ms Beyer left a "lasting impression on the parliament".

"I certainly think Georgina has blazed a trail that makes it much easier for others to follow," he said.