A beloved grandmother allegedly murdered inside her home in Melbourne’s east has been remembered as a “lovely” neighbour.

Irene Herzel, 78, was found with critical stab wounds after police visited her home in Blackburn South to conduct a welfare check just after 11am yesterday.

A 47-year-old woman, who 9News understands is a relative of the woman, was arrested nearby a short time later.

She has been charged with murder.

John Hurley lived on the same street as the grandmother and described her as a “lovely and pleasant person”.

“I used to walk past her place on most days and she would be out there, saying ‘hello, how are you’,” he told reporters today.

“We would talk about gardening. I used to deliver her some lemons and she would bring over something she would make with the lemons. She was a lovely person.

“It’s so sad to see. She was very quiet, unassuming, pleasant. (She) just wanted to be a really nice person. I am just shocked this happened because she was so lovely.

Hurley said he was “fortunate” to have her on the street.

The 47-year-old woman is set to appear at Melbourne Magistrates’ Court today.