New Plymouth local Michael Atkinson captured the clip while he was driving down Devon Street.
He said he pulled over and watched the knights fight for around 15 minutes.
“When the green man came on, they ran out and fought. And they changed partners each time.”
“I just thought it was hilarious. I drove up to the lights and saw it, so I pulled over and watched it. It was so funny,” Atkinson told Newshub.
The tournament started at a pretty quiet time of day but those around seemed to like it, he said.
“It wasn’t that busy. They got a few horns from cars waiting at the lights.”
Atkinson said while this is a first for the main street, it isn’t for the town.
“There has been sword fighting down on the field by Fitzroy Beach.”
He said he only posted the video online for his friends in England but it “went mental”.
The Facebook video has received more than 2000 reactions and shares, with a further 2200 comments.
Social media users have been labelling the video as “great” and “crack-up”, with one commenter suggesting it’s proof that small towns are a bit different.
It is still unknown who the knights responsible are.