Emergency services were contacted after 8pm yesterday after the man in his 30s did not return to the group he was diving with off a spot known as "The Gardens".
"A search effort involving the Westpac Rescue Helicopter and local volunteers was launched yesterday evening, and recommenced at first light this morning," Manhood said.
"Sadly a man's body was located underwater a short time ago, in the vicinity of where the group had been diving."
"Our thoughts are with the man's family and loved ones, and formal identification will be completed in due course."
A report will be prepared for the coroner.