The search for Tyler Nii in Lake Wakatipu has been suspended two weeks after the American tourist plunged into the water in a tandem skydiving jump gone horribly wrong.

The Police National Dive Squad completed the final phase of their sonar search yesterday, but could not find the 27-year-old, Inspector and Otago Lakes district area commander Olaf Jensen said.

The search area has been a 300m radius from where Nii's skydiving instructor was rescued.

On January 10, the pair were the last to jump from a small plane owned by tourism company NZONE.

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Nii is presumed to have died after he and his instructor plunged into the lake's icy waters after getting into difficulty during the fall.

• READ MORE: Police hold blessing at Lake Wakatipu for missing man Tyler Nii

The instructor was plucked from the lake alive but Nii, who had been travelling New Zealand alone before the jump, hasn't been seen since.

"This has been a difficult search, given the weather conditions on the lake, and the depth of searching," Jensen said.

Police have been operating at a depth of 340m,12m more than the Sky Tower's height.

Lake Wakatipu is New Zealand's third largest body of water.

Tyler Nii, 27, from California is believed drowned after he fell into Lake Wakatipu following a skydiving accident. Photo / Facebook
Tyler Nii, 27, from California is believed drowned after he fell into Lake Wakatipu following a skydiving accident. Photo / Facebook

"Suspending the search is not the outcome we wanted.

"We were obviously wanting to return Tyler to his family and it's very disappointing that this couldn't be done.

"We have advised the Nii family of this, and they will be returning to the United States tomorrow."

Nii's family was disappointed not to have his body, but appreciative of police efforts to find him, Jensen said.

• READ MORE: Missing skydiver Tyler Nii from California discussed plans to skydive and visit Kiwi beaches

In a statement, Nii's family said they "can't get over" the support from the community and the rest of New Zealand.

"We want to thank Kate and Philip Rive, of Cecil Peak Station, who were extremely helpful in the initial search on the lake for Tyler, and for all the equipment and support they've given the ongoing search," the statement read.

"Their efforts have been outstanding, as have those of the police.

"We also want to thank the businesses of Queenstown that have supported us with food, vouchers, and other activities while we've been staying in town."

Police will be providing details of the search efforts to the Coroner to assist in the ongoing coronial process.