A DISTRESS beacon was activated 14 kilometres east of Jervis Bay on Saturday morning.
Marine Rescue NSW received the call at 10.19am.
At 11.07am, Westpac Lifesaver helicopter located the distress beacon and a small tender, with two people on board.
A larger vessel had sunk. Both survivors have been reported as alright.
Marine Rescue NSW regional operations manager Glenn Sullivan said Westpac helicopter hovered over the tender until the arrival of marine rescue vessel Jervis Bay 40 arrive.
“Once on scene the casualties were taken aboard and the dinghy was taken under tow,” he said.
“The incident is a timely reminder to wear a life jacket, carry an EPIRB, have a marine-band radio and a mobile phone if heading out on the water,” Mr Sullivan said.