Police had said for days they were willing to wait out Molenaar - whom they said repeatedly sprayed gunfire at them
- rather than raid the house in Napier city. Hundreds of people from surrounding homes, schools and businesses were evacuated as a precaution.
But as the standoff entered its third day on Saturday, Superintendent Sam Hoyle said officers used explosives to blow a hole in the house's ground floor to see inside and to destroy any booby traps.
Police still had no view of the master bedroom where Molenaar had barricaded himself, he said. When they finally entered the house, Molenaar was dead, Hoyle said.
Police had earlier called in friends of Molenaar, 51, to help them negotiate an end to the standoff but without success. Gunfire erupted periodically from the house, apparently directed at the police outside.
There was no indication that Molenaar made any demands and he reportedly told friends at one point that he would rather die than be sent to prison.
Hoyle said he was not able to comment on how or when the gunman died, though police said earlier they did not shoot at the man.
Hoyle told reporters police had located explosives in the house and would maintain extensive cordons for some time.
"Explosives experts are assisting us to make sure the house is safe," he said, adding that residents would continue to be kept away from the area.
Molenaar became enraged Thursday when he arrived home to find police in his house conducting a drug raid. According to police, he fired a fusillade of shots from an automatic rifle, killing one officer and seriously wounding two others. A bystander who tried to wrestle the gun away from Molenaar was also shot.
It was unclear why the bystander was at the property or whether the attack happened inside or outside the house.