UPDATE 6.05pm: One of two fishermen plucked from the ocean in a dramatic search and rescue operation this morning has died.
The two were found on the coastal side of Beagle Islands after a huge search that covered 320sqkm of ocean off Leeman. They were pulled from the water and taken to Leeman nursing post about noon today.
The medical centre has confirmed that one man, aged 23, has died. His mother, sisters and brothers have been devastated by the man's death.
-Listen to Grant Taylor's dramatic first-hand account of the rescue- Audio courtesy ABC
-Grant Taylor describes sharks circling fisherman- Audio courtesy 6PR
It is understood that he was unconscious when he was pulled from the water and attempts to resuscitate him were unsuccessful.
A third man, also 23, who was with them when they set out by boat from Leeman yesterday morning, has not been found. A search for the missing man would continue by boat this evening, police said.
A full search would resume at first light tomorrow with aircraft, boats and a foot patrol on Beagle Islands.
Police divers tomorrow would attempt to float the men's sunken boat, which is in 5m of water, police said.
The first of the men, who has survived, was found by the Seven News helicopter floating naked and alone in the ocean and with a large shark nearby.
The 49-year-old survivor - the uncle of one of the men - has been interviewed to determine what happened to their boat. He has severe hypothermia and was flown to Perth by the Royal Flying Doctor Service. He is being treated in Royal Perth Hospital.
Reporter Grant Taylor told 6PR that the man he spotted appeared to be fatigued and that a large hammerhead shark was nearby.
At that stage there was no sign of the other two fishermen, he said.
The first man was found soon after Taylor in the Seven News helicopter saw debris including chairs in the water.
One of the search and rescue planes dropped a life raft to the man, Taylor told 6PR.
A rescue craft headed to the area.
Taylor said the fisherman struggled to swim to the life raft. Taylor described the rescue as "incredible".
As the rescue boat approached, Taylor said he saw the man "clasp his hands together like he was saying a prayer".
The second man was found by a rescue helicopter a short time later.
The two were found about 30km north of Leeman.
The search was launched after the three men failed to return from a fishing trip last night. The two 23-year-olds were friends.
They are all from Perth and are related to people in Leeman, police said this morning.
The three were in a 5.5m vessel that left Leeman about 11am yesterday.
Acting Senior Sergeant Peter Trevitt of the Water Police told ABC radio this morning that the men were not familiar with the area and the sea conditions.
He said police had information that before setting off, the men had asked a local resident about where to find dhufish and were advised to head 10 nautical miles west of Leeman or 10 nautical miles north-west, towards the Beagle Islands.
Sen. Sgt Trevitt said the search area was therefore very large - about 324sqkm.
The men were believed to have all emergency equipment on board - an EPIRB, lifejackets, flares, radio and a mobile phone.
The boat was found mostly submerged, with only a portion visible from the air.
Sen. Sgt Trevitt said a family member had received a call from the men last night but could not make out what was said.
About 3.30pm, two waves swamped the boat and threw the men into the water. The boat sank quickly.
As night fell, the men drifted apart.
Police searched for the men until 2.30am and restarted the search at first light today.
Conditions on the water yesterday and overnight were moderate with a swell of about 2m.
Overnight temperatures in the area were also moderate, dropping to a minimum of 8.3C.