Three men have lived to tell the tale, after spending 15 hours at sea, clinging to an esky to stay afloat.
The men had been fishing near Yeppoon off the central Queesland coast when their five metre run-about sank.
Rescue crews said the men were only saved after one managed to dial for help using his mobile phone.
Survivor Tony Minze said the boat sank very quickly and he almost did not make it out.
"I couldn't get out so I had to duck through, blow bubbles, and see which way was up and just keep swimming until I got through the little manhole," he said.
The missing men were located off the coast of Yeppoon around 10.10am today.
Search conditions had been reported as poor with 20 knot south east winds, a 1.5 to 2 metre swell and poor visibility.
A spokesperson for Central Queensland Helicopter Rescue Service said the horrendous weather conditions were of a concern to the rescuers.
While the RACQ Central Qeensland helicopter was equipped with Forward Looking Infrared equipment, the spokesperson said it was the sharp eyes of a crew member on board the RACQ Capricorn Rescue helicopter that spotted the missing men.
A triple zero call from a man on-board the sinking boat off Yeppoon sparked the search and rescue operation for the three men around 7.20pm on Friday.
The man managed to provide GPS coordinates before the phone call cut out.
Police said the GPS location indicated the vessel, a 5.6 metre white runabout, was located approximately eight nautical miles southeast of Flat Island, Yeppoon.
Inquiries by police established two Blackwater men, aged 25 and 21 and the Yeppoon man set out for a fishing trip to Flat Island on Friday.