Two people have died after a boat capsized on the Clarence River bar at Yamba. (ABC North Coast: Lachie McLeod)

A man and a woman have drowned and a third person is in hospital after a boat capsized at Yamba on the NSW far north coast.

The incident happened just after 6:30am on the Clarence River bar near the Yamba breakwater, prompting a multi-agency response.

NSW Police Chief Inspector Matt French said the boat carrying the three people capsized as the group attempted to cross the river bar.

“A 52-year-old man was located on a life raft. A passing vessel assisted that man and towed [him] to shore,” he said.

“Tragically, a 54-year-old woman and a 59-year-old man were located deceased in the water.

“We believe they were all wearing life jackets.”

Police believe the group was not from the region, and that the 52-year-old was the skipper of the boat.

He remains in a stable condition in hospital.

Far North Coast Surf Life Saving duty officer Chris Samuels said police were still investigating what caused the boat to capsize.

“Today, the swell conditions were quite significant in the Yamba area across the bar,” he said.

“But any sort of coastal water can have the potential to be quite dangerous.”

Alex Mars was having coffee at a nearby park this morning when he saw a red flare in the sky above the breakwall.

“I ended up walking up to the lighthouse and saw the boat capsize and another boat circling around searching for people,” he said.

“A few minutes later the helicopter arrived and that’s when I thought, ‘This could be really serious.’

“It is extremely tragic and sad, and my heart goes out to the families and the lost souls.”

Four killed in drownings

The tragedy comes just a day after a husband and wife drowned on the NSW South Coast.

“This past fortnight has been catastrophic on our coastline. These are the seventh and eighth drownings in under two weeks,” Surf Lifesaving NSW CEO Steve Pearce said in a statement.

“In under 24 hours our lifesavers and other emergency services have responded to four tragic drownings which have been beach and boating related.

“[It] reinforces that whether it be summer or not, the risks remain the same along our coastline.

“Our thoughts and sympathy goes out to all the families of the victims.”

Mr Pearce said there had been 45 coastal drownings in NSW since July 1, half of which were beach and rip related.