Skeletal remains have been found in a car recovered from the bottom of Nelson Harbour last night.

Police are reasonably confident the vehicle recovered from the harbour last night belonged to missing teen Leo Lipp-Neighbours.

They have this afternoon confirmed they have found what appear to be skeletal remains during a search of the vehicle.

Identification of the remains will take some time.

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The 19-year-old was last seen on January 24, 2010, driving away from his home in a valley suburb near the Nelson coast in a distinctive orange station wagon.

On Monday afternoon commercial divers stumbled on a car submerged in Wakefield Quay in Nelson's harbour. The vehicle was recovered last night as Lipp-Neighbours' family watched, Fairfax reported.

"It was a bit of a tricky recovery last night," Nelson Bays police area commander Mat Arnold-Kelly said earlier.

"Because of the length of time that the vehicle has been under water, it's obviously difficult to confirm the identity of it. However, from some of the contents we've found, we're reasonably confident that it is Leo's vehicle."

Arnold-Kelly said he could not say what items found in the vehicle were, and said it would take some time to go through it as there was "a lot of silt and debris and other material in the vehicle".

Police have been in constant communication with Lipp-Neighbours' family.

"They've obviously got some sense of closure," he said.

- NewstalkZB