The correct preposition is "in Hawaii" when referring to the state as a whole or its major islands.
Use "in" for:
Use "on" for:
English typically uses "in" for political/geographic entities with area (countries, states, large islands) and "on" for surfaces or small landmasses where you're physically atop them. Since Hawaii's main islands are substantial landmasses with interior areas, "in" is standard—just as we say "in England," "in Japan," or "in Long Island."
Exception: "On the Big Island" is commonly used colloquially for Hawaiʻi Island, but "in Hawaiʻi Island" is equally correct and preferred in formal contexts.