Marine Rescue NSW said a boat crashed into rocks near The Gap at Watsons Bay which is believed to have been carrying two people on Thursday afternoon.
NSW Police confirmed a body was found in the water at The Gap on Thursday.
Now authorities are continuing a search for a missing boater.
The search kicked off at 8am this morning with a joint operation between Marine Rescue NSW and water police, Marine Rescue NSW Inspector Steve Raymond said.
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“They are conducting a parallel line search from The Gap south to Wedding Cake Island off Coogee,” Raymond said.
“Sea conditions around the search area are fair, there is a bit of a swell but visibility is fairly good for the Marine Rescue NSW search crews.”
Other crews are searching further south at Maroubra Beach as well.
NSW Police are expected to provide an update on the incident shortly.