Jacob Bell, 21, was charged with murdering the 40-year-old man, who died in John Hunter Hospital after the alleged physical altercation - following an earlier argument - at a home on Kankool Way.

Police said in a statement on Saturday a knife was allegedly pulled in the fight and the older man suffered stab wounds to the chest before emergency services were called to the scene about 4.30pm.

When they arrived, witnesses had already driven the victim to Belmont Hospital. He was transferred to John Hunter Hospital for surgery, the police statement said, where he died.

Mr Bell was arrested on Cherry Street just before 5pm, in a neighbourhood near the crime scene just off Newcastle Inner City Bypass.

Mr Bell's brother, Jonah Bell, was also arrested at the same time but over an unrelated matter, Lake Macquarie police told the Newcastle Herald on Saturday.

Police said the deceased 40-year-old man and Jacob Bell were known to each other.

Mr Bell was taken to Belmont police station where the charges were laid, and appeared at Newcastle Local Court on Saturday morning.

He did not apply for bail and it was formally refused. He is expected to appear in court, again in Newcastle, on Tuesday.

Jonah Bell, meanwhile, faced unrelated charges of affray, offensive behaviour, breaking and entering and a failure to appear in accordance with a bail acknowledgement, and was similarly refused bail on Saturday in Newcastle Local Court. He will appear again at Toronto Local Court on Monday.