UPDATED 2.45pm

Police have said they no longer expect to find missing pilot Matt Wallis alive, after a helicopter crash in Wanaka yesterday.

Police have confirmed 39-year-old Wanaka local Matthew Timothy Wallis was the only person on board a helicopter which went missing at Lake Wanaka yesterday.

Detective Sergeant Derek Shaw said the area was under a severe weather watch yesterday and police no longer expect to find Wallis alive.

"We have now transited into a recovery phase and we do not believe that the pilot is still alive," he said.

Shaw made the comments in a media briefing this afternoon.

The search for Wallis had previously resumed this morning.

Matt Wallis is the son of Warbirds over Wanaka founder Sir Tim Wallis, and the helicopter was part of the Alpine Helicopters fleet, owned by the Wallis family. A spokesperson said this morning the family would be making a statement today.

Matt Wallis, son of Warbirds over Wanaka founder Sir Tim Wallis, is missing after his helicopter went down yesterday. (Photo / Supplied)

Shaw said the national dive squad arrived this morning and are focusing their search near the oil streak.

"They are going to investigate the oil slick that has stopped coming up from the lake, but the marker indicated where that was.

"They've arrived in Wanaka and already deployed and they should have an indication of what they'll face by this evening.

He said Alpine Helicopters initially started the search after reporting that one of their helicopters was missing around 1pm yesterday.

They dropped a marker in the Stevensons Arm area after finding the oil streak and debris in the water.

The rescue centre was alerted to a Robinson helicopter that disappeared from its tracking system.

Wreckage of the crash was found on the shoreline of nearby Stevensons Island, as well as an oil slick found in the water 1km north.

The Maritime Rescue Coordination Centre, police and Coastguard are all involved in the search that was suspended last night until this morning.

Queenstown Lakes Mayor Jim Boult said the community was devastated.

"The whole Wallis family is well-known in the community. They were liked and respected.

"Everybody there will be enormously sorry about this."

Boult said he knew Sir Tim very well and his heart went out to him and the rest of the Wallis family.

"It's very hard to put words around these things, but it's just a horrible thing to occur."

Tim Wallis, left, founder of Warbirds over Wanaka pictured at the Classic Flyers museum in 2007. His son is believed to be missing at Lake Wanaka. (Photo / File)

Three helicopters from the same company retraced the flight path of the missing chopper and spotted a wreckage on the shoreline of nearby Stevenson Island, as well as an oil slick in the water 1km north.

Rescue Coordination Centre NZ senior search and rescue officer Chris Henshaw said it was confirmed the wreckage was that of an R44 Robinson helicopter.

Maritime rescue co-ordination centre, police and Coastguard are all involved in the search, but the mission has had to be suspended until the morning.

"Another team will land on Stevenson Island where wreckage was seen to establish if further information can be gleaned," Henshaw said on Saturday.

The search at Lake Wanaka was halted overnight and resumed at first light. (Photo / James Allan)

He said there was one person aboard the helicopter when it went missing.

Six helicopters have been involved in the search, including the three choppers from the company of the missing craft.

A police spokeswoman said it received reports of a downed helicopter, but Maritime New Zealand's Rescue Co-ordination Centre was leading the operation.

Metservice meteorologist Ravi Kandula said it had been a "cloudy, gloomy day with reduced visibility" since about midday in Wanaka.

There had been occasional steady rain and cloud had dropped to about 1000-1200 feet.

While there had been some gusts late morning, the wind had not been "spectacular" for most of the day.

(Graphic / NZ Herald)

The Transport Accident Investigation Commission (TAIC) has opened an inquiry into the crash.

The chief investigator of accidents, Captain Tim Burfoot, said the commission appointed a team of two investigators, who are due to arrive at the accident site tomorrow.

The commission opens an inquiry when it believes the circumstances of an accident or incident have - or are likely to have - significant implications for transport safety, or when the inquiry may allow the commission to make findings or recommendations to improve transport safety.

TAIC put Robinson helicopters on its watch list - the highest alert it can give - in 2016.

Citing 14 mast-bumping accidents costing 18 lives since 1991, the commission called for renewed testing of Robinson helicopters, among other recommendations aimed at promoting safe handling of the machines.

The Department of Conservation suspended use of Robinson helicopters in November 2016 because of safety concerns and has now made the move permanent following external and internal reports.

The estimated additional annual cost of using helicopters other than Robinsons is $350,000.

Robinson helicopters make up 35 per cent of the New Zealand fleet but 49 per cent of accidents, 64 per cent of fatal crashes and all seven fatal mast-bump accidents.

Lake Wanaka is New Zealand's fourth largest lake, at 192sqm and an estimated 300m deep.

The lake is used for adventure tourism all year round.

The flying career of the missing man's father, Sir Tim Wallis, ended in 1996 after a near-fatal crash in one of his Spitfire fighters at Wanaka Airport.