One man is dead and another rescued after a birthday fishing trip went wrong in South Otago when their boat overturned.

The men were brothers-in-law on a 60th birthday fishing trip.

The vessel, a fibreglass runabout, turned over in rough conditions as the pair approached the Catlins River sand bar, near Pounawea, this morning.

Police, volunteers, rescue vessels from Coastguard Bluff and Coastguard Dunedin and a rescue helicopter joined the short search for the men.

In a statement this afternoon, police said emergency services were alerted about 10.40am and confirmed that a body had been found on a nearby beach.

A second person on the boat was found on rocks nearby. A dog was also bought to shore.

"We would like to extend our thanks to the volunteers and members of the public who assisted in today's rescue efforts."

The man was flown to Dunedin Hospital in a moderate condition, a spokeswoman for Hato Hone St John said.

Surat Bay Lodge co-owner Ester Johnson told an Otago Daily Times reporter and photographer at the scene the pair were brothers-in-law who were celebrating a 60th birthday.

She said she watched the boat go slowly for a time this morning in an area known to be rough.

"And I thought to myself, 'What the hell are they doing?'"

Johnson said about half an hour after seeing the boat, she heard the fire brigade and hoped it wasn't for the fishermen, but then realised that someone may have drowned.

The area is known to be dangerous, with drownings and near-deaths previously reported after vessels capsized.

Conditions were rough this morning, though it was not too windy.

It was the third time a boat had rolled crossing the bar in recent memory, Ms Johnson said.

A spokeswoman for Hato Hone St John said the ambulance service was notified of a water incident at 10.38am and sent a first response unit, one manager, one ambulance and one helicopter to the scene.

A spokeswoman for Fire and Emergency NZ said one crew from Owaka was sent to the scene.

The boat had been recovered from the water, police said.