The helicopter ditched only about 40 metres off the headland between Circuit Beach and Lilli Pilli Beach.

Witnesses said they heard an explosion and a change in the aircraft's engine noise before it went down.

Water police from Port Kembla and expert police divers from Sydney retrieved the chopper yesterday morning after they hooked an inflatable buoy onto the wreckage, and then towed it around the headland to Mosquito Bay boat ramp.

With the help of a tow truck, the chopper was then pulled out of the water and examined, just after 11am.

Batemans Bay Police Inspector Toby Lindsay said the retrieval was able to preserve as much of the helicopter as possible and was safer.

"Obviously someone died as a result of the incident and, at the very least, we'll be reporting on the matter for the coroner," he said.

He said there was no indication of what caused the crash and police were yet to formally interview the survivor.

The Robinson R44 ditched on Sunday evening while carrying an elderly Malua Bay couple, Victor and Helen Hansen.

The 72-year-old pilot was pulled from the water unhurt. His 70-year-old wife died at the scene.

The couple also own a home at Broughton, north of Berry.

Surf lifesavers attempt rescue

Far South Coast Surf Life Savers were unable to revive the woman.

Volunteer Surf Life Savers from Batemans Bay and Broulee Surf Life Saving Clubs responded in three inflatable rescue boats, after reports were received of the helicopter crashing and people heard in the water crying for help.

Batemans Bay Life savers found the woman and pulled her from the ocean just before 7pm and immediately commenced resuscitation.

She was found floating near debris, and was unconscious at the time.

Lifesavers continued resuscitation before handing her over to a waiting ambulance.

Meanwhile the 72 year old Malua Bay Pilot was winched to safety by the SnowyHydro Rescue Service.

Surf Life Saving Duty Officer Andrew Edmunds said it was a challenging rescue.

“Our guys did a fantastic job,” he said. “It was very dark, but they were well equipped with lifejackets, lights and emergency locating beacons.”

“It was an incredibly brave rescue, and while the resus was unsuccessful, they gave the woman every chance of survival and acted in an incredibly professional manner.”

Mr Edmunds also praised the actions of a Lilli Pilli teenager who entered the surf along with a police officer in an attempt to rescue the pair.