The helicopter was travelling from Brisbane to Bankstown on Friday when police were advised it had disappeared from the Williamtown flight radar around 6.15pm.

Police confirmed the tail rotor and the main airframe of the helicopter were spotted about 8 kilometres south of Fingal Bay, however, no significant wreckage has been recovered due to adverse weather.

Four men and a woman were on board the Bell uh-1/B205 aircraft that goes by the nickname "Huey", including the helicopter's owner and experienced pilot David Kerr of Brisbane Helicopters.

Friends said Mr Kerr has a "wonderful family" and was "always interested in flight, especially helicopters" after spending time in the navy. The helicopter had flown in Vietnam and US Marine Corps before it was restored by Mr Kerr.

Police said two of the four passengers were Queenslanders Jamie Ogden and Grant Kuhnemann who are friends of Mr Kerr.

The Australian Defence Force has also confirmed that one person on the flight was an off-duty member of the ADF.

There have been no sightings of the passengers and a search and rescue operation led by the Australian Maritime Safety Authority was suspended at midday on Saturday due to "expert medical advice and the discovery of the damaged airframe".

"AMSA would like to thank all the agencies involved in this rescue in extremely challenging conditions and extends our deep sympathies so the family and friend of those aboard the helicopter," a ASMA statement said.

NSW Police suspended their search on Saturday afternoon due to the dangerous conditions, but say they will resume once winds die down.

Emergency services began looking for the aircraft in waters off Anna Bay on Friday night and continued until 12.50am on Saturday, before beginning again at 7am.

It has covered about 150 square nautical miles where the radar signal was lost.

On Saturday AMSA said weather in the area at the time the aircraft went missing was "poor with strong winds and reduced visibility."

"Air traffic control indicated that the aircraft was rapidly losing altitude when contact was lost, there were no detected emergency beacons signals or Mayday calls," it said.

NSW Police Marine Area Command, Port Stephens-Hunter Police District, Westpac Rescue Helicopter, NSW Marine Rescue and other aerial support had assisted with the search.

A NSW Police vessel and the Westpac Rescue Helicopter Westpac 1 each sighted the two parts of the wreckage between 8.45am and 9.30am on Saturday morning.

An observer on Westpac 1 witnessed the airframe sink a short time later before it could be reached.

The Bureau of Meteorology had issued a severe weather warning on Friday for the region where the helicopter lost contact in Anna Bay.

It predicted damaging, locally destructive winds with peak gusts in excess of 125km/h and average gusts of 80km/h-90km/h.

It said a strong cold front from the west was sweeping across the state, generating the vigorous westerly winds.

A video published on Brisbane Helicopters' YouTube channel in December last year advertised "Huey Warbird" flights on the aircraft, with "co-pilot, observer, troop and gunner" seats.

Previous report: The search for a missing helicopter that crashed with five people on board off Anna Bay on Friday night has been called off, with authorities now focused on a recovery operation.

The Australian Maritime Safety Authority, which was coordinating the search, issued a statement about 12.30pm on Saturday advising the search and rescue operation had been suspended.

Water police had sighted the tail rotor of the missing helicopter at 8.45am on Saturday, before a Westpac Rescue Helicopter crew sighted the main airframe semi-submerged in water about 8km south of Fingal Bay at 9.30am.

"The observer aboard Westpac 1 witnessed the airframe sink a short time later before surface assets were able to reach the area," the AMSA statement said.

"The location of the airframe is consistent with the drift model of where the aircraft was believed to have entered the water.

"There have been no sightings of the occupants of the helicopter."

On the advice of medical experts, and after the discovery of the damaged airframe, AMSA suspended the search and rescue operation at midday.

NSW Police will commence a recovery operation with divers expected to be on site on Saturday afternoon.

The Australian Transport Safety Bureau will begin an investigation into the incident.

EARLIER: A private helicopter is believed to have crashed in waters off Anna Bay after going missing from Williamtown Airport's flight radar on Friday night.

NSW Police on Saturday said wreckage had been spotted off Fingal Head but no wreckage had been recovered due to adverse weather.

Inquiries suggest the aircraft had five people on board - four men and a woman - and was travelling from Brisbane to Bankstown.

The search was suspended about 12.50am on Saturday morning but recommenced about 7am.

It's understood the helicopter was owned by Brisbane Helicopters.

Divers are expected to arrive at the scene soon.

The Westpac Rescue Helicopter Service issued a statement on Saturday morning:

"The helicopter searched in very difficult conditions using night vision goggles, along with surface vessels, locating some wreckage," the statement said.

"Due to the conditions the helicopter returned to Belmont base and an AMSA fixed-wing search and rescue aircraft from Essendon continued the search throughout the night.

"The helicopter returned to the search area early this morning, along with two other rescue helicopters; AMSA jet and numerous surface vessels from NSW Police and Marine Rescue NSW," the statement said.

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FRIDAY NIGHT REPORT: NSW Police were advised at about 6.30pm on Friday night that an aircraft had "faded off the radar" near Anna Bay, a police media spokeswoman said.

Officers from Port Stephens Police District and the Marine Area Command, along with Marine Rescue and other aerial support, are conducting a large scale search of the area.

The police spokeswoman could not confirm what type of aircraft was involved, or where it had come from, but the Australian Maritime Safety Authority has since confirmed it was a private helicopter.

An AMSA spokesman said initial reports suggested the helicopter was out of Coffs Harbour and five people were on board.

The Australian Maritime Safety Authority, which is coordinating the search, deployed its search and rescue aircraft out of Melbourne and it is conducting flyovers of the area.

A Westpac Rescue Helicopter Service spokesman said one of its helicopters was in the air as well.

"Our aircraft is still up in the air in that area after the report of an aircraft crash," he said at about 9pm.

"There was a call through air traffic control at Williamtown, that they'd lost contact with an aircraft."

The NSW Incident Alerts page on Facebook said debris had "been spotted by Marine Rescue crews during the search". That information is yet to be confirmed.

The Bureau of Meteorology issued a severe weather warning on Friday night for the region where the aircraft lost contact, predicting damaging, locally destructive winds with peak gusts in excess of 125km/h and average gusts of 80km/h-90km/h.

It said a strong cold front from the west was sweeping across the state, generating the vigorous westerly winds.

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