An Osprey MV-22 helicopter carrying members of the Marine Corps crashed near Rockhampton off the Queensland coast, Australia on Saturday afternoon.
The US Marines Corps said 23 personnel aboard were rescued and the search and rescue mission continues off the coast of Shoalwater Bay for the missing three.
The MV-22B "Osprey" tilt rotor aircraft, which can take off and land vertically, has a crew of four and can carry up to the 32 people.
The aircraft was conducting regularly scheduled operations when it crashed into the sea.
In July the aircraft was posted to Queensland as part of the military exercise Talisman Sabre, involving 33,000 personnel, 33 ships and 200 aircraft from Australia, the US, New Zealand, Japan and Canada.
The Australian defense minister, Marise Payne, issued a statement Saturday saying she had been advised of the incident off the coast of the country's Shoalwater Bay.
Search-and-rescue operations are ongoing, and authorities are investigating the crash. They have been involved in a series of high-profile crashes in recent years.
"The circumstances of the mishap are now under investigation", the release states.
Twenty-three of the 26 personnel aboard the Ospery were recovered by the nearby ship's small boats, and search and rescue efforts are still underway, the statement said. "The United States is leading the search and recovery effort".
'Our thoughts are with the crew and families affected'.
"It had a very hard development period", said Richard L. Aboulafia, an aircraft consultant and analyst with Teal Group, an aerospace and defense consultancy.
In December 2016, the USA grounded its fleet of the aircraft in Japan, after one crash-landed off Okinawa. Last month, a cargo plane carrying 15 Marines and one sailor crashed in western MS, killing all aboard.