Gus Hutt spotted a wee boy floating motionlessly across the water when he was fishing at Matata beach.
The 18-month-old bub had escaped from his parents' nearby tent at the Murphy's Holiday Camp, the Whakatane Beacon reported.
Hutt said he first thought the baby was a porcelain doll before he pulled the infant out of the water.
"His face looked like porcelain with his short hair wetted down.
"But then he let out a little squeak and I thought, 'oh God, this is a baby and it's alive'."
"He was bloody lucky, but he just wasn't meant to go; it wasn't his time," Hutt told the Beacon.
His wife Sue rushed back to the holiday camp to find the child's parents.
When the couple later stopped by to thank Hutt the wee boy was back in good spirits.
"He was wriggling trying to get down to have a look at everything, he was just a lovely, cheeky little fella," Gus Hutt told the Beacon.
A police spokesman confirmed to the Herald that they attended the emergency at 7.45am and were not taking any further action in relation to the case.
