A hero Australian tourist who was swept away while saving a drowning swimmer has been found dead in Bali this morning.

Craig Laidley, 56, from Perth, dived into the choppy waves to rescue Mirco Stalla, 29, from Germany, who was struggling in the conditions on a beach near his hotel in Tabanan Regency on October 16.

The bodybuilder saved the swimmer but disappeared into the water and had not been seen since Wednesday afternoon at around 4.15pm.

Search efforts had continued along the coast but Craig was found dead on Friday morning, October 18. His body was on Secret Bay Beach, around 1km from where he was pulled into the surf.

Rescue chief Kadek Adi said: 'On the third day of the search, the victim was successfully found. He was dead.'

Officials said the search and rescue team took Craig's body to the Selemadeg Barat Health Center using the Bhuana Bali Rescue Ambulance.

Iptu Gusti Made Berata, head of Public Relations of the Tabanan Police, said that Craig was trying to save the swimmer when he himself was dragged away by the ocean,

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 that the initial tourist, Mirco, had been swimming at Balian Beach when a large wave dragged him away from the shore.

He screamed for help, and Craig, who was walking nearby, heard the cries and immediately swam to their 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.'