The fisherman were last seen boarding a boat that left Bellambi Beach at 2pm yesterday.
Family members alerted authorities at 6am today when the men did not return home on time.
Officers from Wollongong Police, Marine Area Command and PolAir, along with members of Surf Life Saving NSW lead the search.
The upturned boat was located off Port Kembla and the three bodies have yet to be formally identified.
The ute the men were travelling in and their boat trailer were located in the boat ramp car park at Bellambi.
Anyone with information is urged to contact police.