A Sri Lankan Tamil man who has become the sixth refugee fatality on Manus Island in four years had been facing rape charges.
Australia's immigration department confirmed the death at Lorengau Hospital but directed inquiries to PNG authorities.
It's believed the 32-year-old man took his own life early on Monday morning.
Refugee Action Coalition spokesman Ian Rintoul confirmed the man had been facing rape charges against a local woman following an alleged incident at a motel earlier this year.
The matter was yet to go to court and the man had intended to vigorously defend the charges, Mr Rintoul said.
Sudanese refugee Abdul Aziz said the man had been his roommate before he moved to the transit accommodation centre outside the detention complex four months ago.
He said his friend had applied for resettlement in the US but was yet to hear back on the outcome.
"He was nice guy and quiet guy," Mr Aziz told AAP on the phone from Manus Island.
"In the past few months he's been having ... mental problems and was in need of care."
Mr Aziz said after a recent psychiatrist appointment the man had been kept in isolation at the detention centre for four to five days before he was sent to Lorengau.
"If he was offered appropriate health care and support he wouldn't have to take his own life," Mr Aziz said.
"There are not enough doctors or proper treatment."
Mr Aziz said there were five other men who were suffering from severe mental illness symptoms including two men who regularly walked naked in the streets.
The behaviour had caused problems in the local community, he said.
Former Manus Island MP Ron Knight said the magistrate on the island would be conducting a coroner's investigation over coming days.
"It seems like a suicide but it's not confirmed yet," Mr Knight told AAP.
He said locals had become increasingly frustrated with the problems that had come with hosting the immigration detention centre, slated for closure at the end of the month.
"It's given the island a bad name. It's given the people a bad name. When people are being looked after by our government and the Australian government have to resort to something like this to prove a point, it means that something is terribly wrong with the whole system," Mr Knight said.
Greens senator Nick McKim said the case was "catastrophic neglect" from Immigration Minister Peter Dutton.
"You've got this man's blood on your hands," Senator McKim said in Hobart.
Refugees and asylum seekers are due to hold a memorial service for the man on Monday afternoon.
The body of Iranian refugee Hamed Shamshiripour was found near refugee accommodation in early August.
The death comes as more than 50 refugees last week left Manus Island and Nauru for a new life in the US.
More are expected to follow in coming months.
Readers seeking support and information about suicide prevention can contact Lifeline on 13 11 14.
Multicultural Mental Health Australia www.mmha.org.au.