Patrick Timoney, known as Paddy, is thought to have suffered a heart attack during a grading session in Livingston, West Lothian, as his wife Jackie sat on the panel judging his performance.
The 42-year-old father-of-three's closest friend, John McIlvaney, helped to administer CPR while waiting for an ambulance to arrive.
Mr Timoney had enjoyed a high profile within the popular sport, and was a board member of the International Taekwondo Federation (ITF) Scotland.
The black belt fought in the 1998 World Championships and was the current Scottish, Northern and British Champion in the "hand destruction" discipline. He also coached the Scottish team.
Mr McIlvaney, who owns the G-Mac gym where his friend died on Sunday, said Mrs Timoney was distraught.
He said: "Paddy was sitting his fifth degree black belt and was on the floor performing a pattern when he took a massive seizure and collapsed.
"His wife was on the panel for the grading so she watched it all happen. By the time we phoned an ambulance and it arrived, we had been performing CPR for about half an hour.
"We had to rush his wife out of the hall because, understandably, she was hysterical. I'll never forget the sound of her screams.
"I was trying to reassure her that he was alright, but she was saying 'I can see it in your eyes that he's not'. Her screams were the most horrendous sound ever, they'll haunt me forever.
"We also had young kids in the hall and had to get them out quickly. It was a really dark day."
Mr Timoney was taken to St John's Hospital in Livingston where he was pronounced dead.
He leaves behind three children, Aiden, 14, Erin, nine, and four-month-old Cody.
Tributes were paid to the "larger-than-life" character, who friends said always had a joke to tell.
Mr McIlvaney, who has known Mr Timoney for years, said: "The response from people has been overwhelming. It shows just how well-known and well-liked Paddy was. He was a larger-than-life character and the finest person I've ever met. He was so family-orientated.
"He was really well known within the taekwondo community, not for his flexibility or high kicks – he was known for his infectious sense of humour and warm personality.
"He was the funniest man I've ever known and the person I would want at my side going through tough times. It's awful he won't be here anymore."
A statement issued by Mr Timoney's family stated: "Patrick was a generous and genuine man who had a special aura surrounding him. His outlook on life was one of the best and he could brighten up anyone's day.
"He had an infectious smile and a wicked sense of humour which many of us felt and heard first hand.
"Today we may not understand why he was taken from us too soon, but Paddy will continue to bring a smile to our faces and enrich our lives for years to come through the many wonderful memories we all hold dear in our hearts."
Mr Timoney, originally from Viewpark in North Lanarkshire, took up the sport when he was 21 and earned his black belt in 1994.
In addition to his other accolades, he was a coach with the Scottish taekwondo team, and travelled with them to the European Championships in Slovenia in 2010.
A Taekwondo Scotland statement said: "A larger-than-life personalty who could bring a smile to anyone, he will be sorely missed. Our thoughts go out to his wife Jackie and three children at this terrible time. He will be sorely missed by all who knew him."