The Police National Dive Squad discovered the man's body just after midday, nearby where he was last seen swimming on Sunday.
Te Awamutu Courier reporter Dean Taylor said the man was an international student from Malaysia, who had been studying at Waikato University.
The man's friends were standing on a bank near the lake this afternoon.
It is believed the 21-year-old was swimming in the lake yesterday afternoon when his friends heard splashing. In the short time it took them to turn around, their friend had disappeared into the water.
The water level in the area where the man disappeared was about 6m-8m deep.
A jet ski at the scene was initially used to look for the man, but was unsuccessful.
Police, the harbourmaster and the Westpac Rescue Helicopter were also involved in the search.
