The search for a sailor who went missing when a yacht overturned off the Queensland coast has ended in tragedy after his body was recovered.

Police said the 65-year-old man had been travelling on the yacht from Yeppoon to Brisbane when an EPIRB was activated about four nautical miles south of Lady Elliot Island about 5am Sunday.

The vessel was found shortly after 10:15am with two men in the water.

RACQ LifeFlight said the father and son had managed to climb onto the upside-down vessel to raise the alarm.

They were winched into a rescue helicopter.

"It's believed the keel snapped on the boat the men were on, causing it to overturn," LifeFlight said in a media release.

Police said a 62-year-old man and 27-year-old man were taken to Bundaberg Hospital where they remained in a stable condition.

They said the body of the 65-year-old man was found shortly after 2pm.

Police said all three men were from Yeppoon.