HALIFAX -- Federal investigators were dispatched to the Halifax area on Tuesday after a boat went down near the mouth of the city's harbour, killing a crew member.

Joint Task Force Atlantic said navy divers found the body of the crew member inside the 12-metre vessel, identified as the service boat Captain Jim.

Two other crew were rescued by a local pilot boat after a distress call came in at about 2:15 a.m., indicating the boat suffered a loss of power and that crew were planning to abandon it.

"The search for the missing crew member is over," Joint Task Force Atlantic said on its Twitter feed at about 11:30 a.m. "Navy divers have located the body of the crew member inside the sunken vessel."

Maj. Amber Bineau said Hercules and Cormorant helicopters, along with three coast guard vessels, were involved in the search of the area near Eastern Passage.

"The Hercules dropped some flares for visual capability," she said.

A Canadian Forces fleet diving unit out of nearby Shearwater also went to the scene soon after the initial call came in, returning Tuesday morning when visibility improved.

Bineau said the people on board reported losing power, but offered no other information about the cause or events leading up to the emergency. She said the weather and sea state at the time were considered normal, with low winds.

"About 20 minutes later they indicated they were taking on water and preparing to abandon."

She said the two people plucked from the water did not have survival suits on, but were wearing flotation devices and were determined to be in good condition after being checked by staff. She said crews got to them within an hour after the last call.

Bineau said the fishing vessel was local and being used in diving operations.

The Transportation Safety Board of Canada dispatched a team of investigators to Eastern Passage following the sinking of the Captain Jim, which is reported to be owned by contractor RMI Marine.

The board said investigators were interviewing people on Tuesday, but had no other details to share.

RMI Marine's website said the company in Eastern Passage has been specializing in diving and marine port services for 30 years.