Sfax prosecutor spokesman Faouzi Masmoudi said the stabbing death of the unnamed 40-year old Tunisian man occurred during a scuffle between local residents and migrants from sub-Saharan Africa.
Authorities say that three migrants from Cameroon residing in Tunisia are under arrests as suspects.
Sfax, Tunisia's second-largest city, is a departure point for many migrants hoping to reach Italy and has in recent months seen tension brew. On Sunday, local police fired teargas to disperse residents and migrants pelting each other with stones.
Locals in Sfax regularly protest the presence of the migrants amid calls for them to leave.
Such tensions have led to deadly violence before. In late May, police arrested three Tunisians on suspicion of stabbing to death a migrant from Benin.
Tunisia has seen a rise in racially motivated attacks on migrants and foreign students following President Kais Saied's comments in February accusing "hordes of illegal migrants" of bringing violence, crime and "unacceptable practices."
He also spoke of a "criminal plot" to change the country's demographic makeup.
With a population of 12 million, the North African nation hosts an estimated 21,000 migrants from other parts of Africa, representing 0.2 percent of the population.
While some migrants come to Tunisia to study, many use the country as a gateway to reach Europe by sea, usually to the Italian island of Lampedusa about 150km from Sfax.
Tunisians themselves have joined the exodus in a bid to flee the economic crisis in their country, which is highly indebted and in talks for a bailout loan from the International Monetary Fund.
Europe has offered funding to help assist Tunisia's efforts against illegal migration and boost the economy.
Saied has repeatedly rejected what he terms the "diktats" of the Washington-based IMF.
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Tunisia Police Guard African Migrants Home after Deadly Scuffles