Emergency services were called to Windang Island just before 1pm after they were told a 21-year-old man had been swept into the ocean.
Police and NSW Surf Lifesavers conducted an extensive search on the water, while the Toll Ambulance helicopter conducted aerial searches.
The body of the rock fisherman was found at about 1.20pm, before being winched from the water by the Toll Ambulance helicopter and returned to shore by water police.
A report will be prepared for the Coroner.
Several other people have drowned in waterways across New South Wales in recent days, including another rock fisherman at Turimetta Beach in Warriewood, a 15-year-old boy at Shoalhaven River in Burrier, and an 18-year-old man in the Murray River at Albury.
Marine Area Commander Superintendent Murray Reynolds said police will continue to do everything in their power to keep people safe on the water.
“The most difficult part of our work is when someone dies or is seriously injured and we know it could have been prevented,” said Superintendent Reynolds.
“These deaths are incredibly tragic.
“Our heart goes out to the loved ones of the people who recently lost their lives in the water.”