A Hughes 500 helicopter flying between the Greenstone Valley and Dumpling Hut crashed yesterday at Glade Burn, near the Lake Te Anau starting point of the Milford Track.
It is understood an experienced helicopter pilot was aboard the Hughes 500 helicopter.
An Invercargill Police search and rescue (SAR) team has arrived in Te Anau to help with the recovery operation.
The SAR crew will accompany a Southern Lakes helicopter crew out to the scene of the crash, and - depending on the weather - they will begin a recovery operation.
Police described weather in the area as "satisfactory" but said rain is possible later today.
Three helicopters, apparently one from the same company and two from other helicopter firms, began searching after the helicopter failed to arrive at Dumpling Hut as expected about 5.30pm yesterday.
The missing helicopter was later located in "very steep" and rugged terrain, about 840m above sea level, near the Te Anau entry to the Milford Track, said Sarah Brazil of the Wellington-based Rescue Co-ordination Centre of New Zealand.
The crashed machine was located at 9.15pm, with only about 15 minutes of natural light left.
Although the weather was cloudy, with drizzle falling, "conditions were OK" and searching helicopters had been able to fly over mountain passes to access the area, she said.
After the crashed helicopter was located, an attempt was made to winch a searcher into the area on a wire rope, Ms Brazil said.
However, the conditions and location meant the person could not be lowered all the way to the ground and so was unable to confirm the condition of the pilot, she said.
The aircraft was last heard from in radio communication between the pilot and his base at 4.55pm yesterday, she said.
It is understood that search and rescue personnel were likely to go to the area at dawn, about 5.30am today.
Richard Hayes, the chief executive and chief pilot of Southern Lakes Helicopters, declined to comment about whether any of the firm's machines had been involved in the search.
He referred all media inquiries to the police. Otago Regional Rescue Helicopter pilot Graeme Gale said the Mosgiel-based helicopter company had not been involved in the search.
Police referred inquiries to the Rescue Co-ordination Centre.
- additional reporting by APNZ