The Sydney Seaplanes aircraft, carrying a pilot and five passengers, crashed about 3.15pm and a search-and-rescue operation later located the submerged aircraft.

NSW Police confirmed all six bodies had been recovered by about 7.30pm on Sunday. There was no further information on the identities of those on board.

There are unconfirmed reports that those on board were four British Nationals, an 11-year-old boy and the pilot.

"Officials from the British consulate are in contact with local authorities in relation to a sea plane accident near Sydney," a spokeswoman for the British Foreign Office said. "We stand ready to provide consular assistance."

The aircraft, which is submerged 13 metres below the surface, has not yet been recovered and will remain underwater under police guard until Monday morning, police said.

The Australian Transport Safety Bureau identified the aircraft as a DHC-2 Beaver Seaplane which was "on a return flight to Rose Bay, Sydney Harbour" from Cottage Point Inn.

"The sequence of events leading up to the accident are not yet understood, however following the impact with the water, the aircraft is reported to have sunk rapidly."

"There are currently no reports of survivors."

Commander of the Kurung-Gai Local Area Command, Acting Superintendent Michael Gorman confirmed all six on board had died.

"We don't know why the plane crashed," he told reporters on the scene on Sunday, adding that air crash investigators would on Monday comb over the plane for clues about what caused the crash.

Forensic police are on the way to Cowan Creek where they will try and identify the victims.

"[There] certainly were people out on boats and on the water which is why if people have seen what occurred please contact marine area command or crime stoppers," acting Supt Gorman said.

The operator, Sydney Seaplanes, said it was "deeply shocked" by the accident and had suspended all operations until further notice.

"We wish to pass on our heartfelt condolences to the family and friends of the passengers and pilot who were tragically killed," managing director Aaron Shaw said in a statement.

"We do not yet know the cause of the accident.

"We are dedicating our full resources in assisting the NSW Police, the Australian Transport Safety Board, Civil Aviation Safety Authority and other relevant authorities to understand the cause of the accident."

Seven News reported that phone footage taken by a group of men on a jet ski showed a Sydney Seaplane overhead, believed to have been captured "just moments before it is submerged".

Myles Baptiste told the Nine Network he saw the plane flying towards him about 500 metres away when it hit the water.

"It made a tight right-hand turn and as it actually turned around, the wings dipped and it nosedived straight into the water," he said.

The Australian Transport Safety Bureau will investigate the incident and release a preliminary report in approximately 30 days, with a final report expected to take up to 12 months.

The Westpac Life Saver Rescue Helicopter found an oil slick and several items of debris on the surface of Cowan Creek, spokesman Stephen Leahy said.

"There appeared to be a silhouette or outline of a small aircraft but it appeared to be submerged in deep water," he said.

"It was certainly too deep for us to access it and that's why the police divers have been called in."

Sydney Seaplanes offers scenic flights over Sydney tourist attractions and waterways including the Opera House, the Harbour Bridge and Pittwater, as well as the Hawkesbury River region.

The popular service has been operating for 80 years, and has carried high profile passengers such as Pippa Middleton and husband, James Matthews.

The Sydney Seaplanes spokesman said most of their scenic tours fly over the region in which the crash has occurred.

The aircraft crashed in Jerusalem Bay near Cowan which is located 30 kilometres north of the Sydney CBD.

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