Rescue teams are searching for a missing Australian tourist who was dragged into the sea while saving a drowning swimmer in Bali.

Craig Laidley, 56, reportedly dived into the choppy waves to rescue Mirco Stalla, 29, from Germany, who was struggling in the conditions and almost drowned.

The holiday maker had been staying near the scene at the Bali Palace Villa at Balian Beach in Tabanan Regency, Indonesia, when he spotted the danger while walking along the sand.

He saved the swimmer but disappeared into the water and has not been seen since Wednesday afternoon at around 4.15pm.  Search efforts have been continuing along the coast.

Iptu Gusti Made Berata, head of Public Relations of the Tabanan Police, said that Craig was trying to save the swimmer.

He added: 'The operation has been challenging due to extreme weather conditions. The waves are very strong.

'We are continuing to search for the missing tourist. He was dragged away by the sea while saving another person.'

Berata said today that Mirco had been swimming at Pengasahan Beach when a large wave dragged him away from the shore.

He screamed for help, and Craig, who was walking nearby, heard her cries and immediately swam to her aid. 

Although Craig managed to pull Micro to the shore, he was then dragged away by the powerful waves and disappeared below the surface.

On the night of October 16, rescuers conducted a ground investigation to search for the victims. 

The following day, the joint SAR team was divided into two units - one unit carried out sea sweeps using a rubber boat while the other conducted a coastal sweep. 

Nyoman Sidakarya, S.H., Head of the Denpasar Search and Rescue Office, added: 'Last night our team tried to find the victim with ground investigation and today the Denpasar Search and Rescue Office dispatched 10 people with land and sea SRU distribution.

'Today the joint SAR team is divided into two SRUs that carry out the sweeping in the sea using a rubber boat and other SRUs carrying out the sweeping along the coast. According to the calculation, today the investigation will be carried out with the parallel search method and the area is approximately 6 nautical miles, from east to west from the location of the drowning victim.

'Until now, the SAR operation is still ongoing and the whereabouts of the victim have not been found.

'Information from the team at the location is that the wave conditions are extreme.'