The helicopter crashed into waters near the Whitsunday Islands off Australia's subtropical northeast late on Friday, sparking a search by the militaries of three nations, but hopes of finding the missing crew were fading.

Lieutenant General Simon Stuart, the chief of the Australian Army, said on Sunday that Australia would ground its fleet of about 45 Taipan helicopters.

"We are not flying the MRH-90 today and won't until we think it is safe to do so," Stuart told reporters in Sydney.

Even before the incident, Canberra had announced it would replace its ageing Taipan helicopters with US-made Black Hawks.

Australian officials have complained about having to repeatedly ground the European-made Taipans, citing difficulties with maintenance and getting spare parts.

Stuart said the current aim was to keep the Taipans in service until 2024 but "what happens between now and then, from what we learn from this incident, is yet to be determined".

Australia's Taipan fleet was grounded for a month after one of the helicopters suffered engine failure during a nighttime training exercise in March, forcing the crew to ditch into the ocean. No one was seriously hurt.

The aircraft that crashed on Friday night was taking part in the Talisman Sabre exercise, which brings together 30,000 military personnel from Australia, the United States and several other nations.

Specialist divers have joined the hundreds-strong search for the missing pilot and three other crew, officials said.

Debris from the crash was recovered on Saturday, with Channel 9 television footage showing a section of the fuselage being lifted from the water.

Stuart identified the four missing crew and said they were all from the 6th Aviation Regiment, based in Sydney.

"You have to feel for their families and their mates," he said.

New South Wales Premier Christopher Minns told Sky News one of the missing crew was the son of a distinguished senior police officer.

Australian Prime Minister Anthony Albanese described the crash as a stark reminder "that there are no safe or easy days for those who serve in our country's name".

He also thanked military personnel from other countries for taking part in the search.

US Defense Secretary Lloyd Austin, speaking in the northern city of Townsville, said the United States would provide any assistance it could.

"Our hearts go out to their loved ones during this terribly difficult time," Austin said of the missing crew.

The Talisman Sabre exercise was paused briefly on Saturday but some operations then resumed away from the crash site.