Fisherman's Shore Station marine radio operator Meri Leask said she received a call about 10.30pm from the owner of the fishing vessel Easy Rider, who spotted the trio.
The man and his family were camping at Caroline Bay on Ruapuke Island, in the Foveaux Straight, when he looked up to see people in the water near his vessel.
The skipper hopped in his dinghy and fished the survivors from the water, carrying the tired trio back to the safety of his camp.
His family looked after the three, who were "not in very good condition'' after being in the water for more than four hours, said Ms Leask.
The trio, suffering from "severe hypothermia'', were flown to Southland Hospital said police.
A hospital spokeswoman said the three were assessed but not admitted and left in the early hours of the morning.
At the same time, a large search operation was launched to find the missing fishing companions, who died during the five hours after their boat capsized.
Emergency services, including police, the Riverton and Bluff Coastguards, two Southern Lakes helicopters, the South Port pilot boat Takitimu and two private fishing vessels, combed the area for the missing men.
One of the bodies was found on a beach at Ruapuke Island and the other was recovered from the sea nearby.
Police inquiries are continuing and the names of the dead men will not be released until next of kin are informed.
Ms Leask said there were few boating incidents in the area last year because local boaties were good at using the radio system to say they were headed out.
She warned boaties to check the weather before heading out, carry a radio and flare and always wear a lifejacket.
Maritime NZ and Police are investigating the incident and the matter has also been referred to the Coroner.
