The suicide of a refugee at Sydney's Villawood centre has sparked fresh debate about Australia's asylum-seeker policy.

The Tamil man - Jayasaker Jayrathana, known as Shooty Vikadan - was discovered in a distressed condition at the residential complex adjacent to the main centre, where families and vulnerable individuals are kept, early yesterday. He died shortly after midnight.

The man had been detained at the western Sydney centre since late March last year and was described by a friend as being 27.

He had gained refugee status in August but was awaiting security clearance for placement in the community. Immigration Minister Chris Bowen said the man was one of 462 people awaiting security clearance from the Australian Security Intelligence Organisation.

He was not considered suitable for community placement, Mr Bowen said. ''There was consultation with the relevant security agencies, that's ASIO, and the advice was it was not appropriate in this case,'' he said.

Refugee advocates said the man's death could have been avoided if he had been processed in the community.

''This event is absolutely tragic but unfortunately it is not surprising,'' Refugee Action Coalition campaigner Jemima Mowbray said.

''We're calling on the Government to shut detention centres and start community processing now.''

A friend of the man said he had overdosed on sleeping pills, but Mr Bowen declined to comment, saying the matter was subject to a coronial inquest.

However, the minister confirmed that the man had sought leave to attend a Hindu festival, which was to be held at Villawood yesterday, but the request had been knocked back. Refugee Action Coalition spokesman Ian Rintoul said the man's bid to attend the festival might have sparked his suicide.

''Whether that was the final straw, it's impossible to know,'' he said.

Greens immigration spokeswoman Senator Sarah Hanson-Young said the death was a tragedy and repeated the party's call for an end to mandatory detention.

''His desperate act, plus the harsh conditions in detention centres as exposed by Four Corners [on ABC television] on Monday night, show why Australia should immediately end its cruel policy of indefinite and mandatory detention,'' she said.

Suicide Prevention Australia chair Michael Dudley said six refugees had committed suicide in detention centres since September last year. Four of those deaths occurred in Villawood.

Dr Dudley said it was clear refugees were suffering in detention centres and Australia's system of mandatory detention had to stop.

''This system disables people, it excludes and vilifies people and it kills people,'' he said.

Former Iranian detainee Iraj Maghadam said the man had been one of his best friends.

Mr Maghadam said he first met him at Christmas Island detention centre and the two men had later been transferred to Villawood.

He remembered his friend as a happy young man who loved music and dancing and who was looking forward to marrying his fiancee on his release from detention.

''I'm so angry he's dead,'' Mr Maghadam said. ''My heart is broken. I plead for the detention centres to close.''

A Department of Immigration spokesman said police would investigate the circumstances of the man's death. Officials were trying to contact the dead man's brother in Sri Lanka.

Readers seeking support and information about suicide prevention can contact Lifeline on 13 11 14, MensLine Australia on 1300 78 99 78 or Multicultural Mental Health Australia at www.mmha.org.au.